What is the benefit of taking out an SBLOC vs. selling portfolio assets?

Using an SBLOC will enable you and your clients to retain assets, keep the portfolio in line for long-term growth, and not trigger capital gains taxes.

What are the benefits of an SBLOC vs. taking out a margin loan, HELOC, or unsecured loan?

The SBLOC offers competitive fixed and variable interest rates that can be less than margin loans, HELOCs, and unsecured loans. See below for the average interest rates for a $250,000 credit line as of January 2024.

Borrowing Options Interest Rate for $250,000 Credit
SBLOC

Based on The Wall Street Journal Prime (WSJP) rate of 8.5%.5 		Variable:
  • 8.375% (WSJP – 0.125%)
36-Month Fixed:
  • 9.25% (WSJP + 0.75%)

*Rates may vary.
Margin Loan (average)6-11 11.97%
HELOC12 8.74% – 10.48%
Unsecured loan (maximum $100K)13 7.99% - 25.49%

What portfolio assets are eligible as SBLOC collateral?

Once the assets are pledged, will I still have access to my clients’ portfolios to make trades?

Markets have been volatile for some time. Can my clients lose portfolio assets if their market value decreases?

How much can my clients borrow?

What are the SBLOC underwriting requirements?

What are the SBLOC repayment terms?

Can my client request an increase in their credit line?

How quickly can clients access funds with an SBLOC?

How can my clients disburse the funds?

1. Subject to credit approval and underwriting.

2. The SBLOC cannot be used to purchase additional securities or to pay off a margin loan used to purchase securities.

3. Securities-based borrowing has special risks and may not be suitable for everyone. Consult a financial advisor about any associated risks. Consult a tax advisor for tax-related matters and an attorney for legal matters. The Bancorp Bank, N.A. does not provide financial, tax or legal advice.

4. The 95% advance rate is for an all-cash portfolio.

5. Bankrate. Wall Street Journal Prime Rate. January 2024.

6. Fidelity Investments. Margin Loan Interest Rates. January 2024.

7. Charles Schwab. Margin Loan Interest Rates. January 2024.

8. Wells Fargo. Margin Loan Interest Rates. January 2024.

9. Morgan Stanley. Margin Loan Interest Rate Schedule. January 2024.

10. Raymond James. Margin Loan Lending Rates. January 2024.

11. Average interest rate for $250,000 margin loan based on rates from Fidelity Investments (11.825%), Charles Schwab (11.825%), Wells Fargo (12.25%), Morgan Stanley (11.95%) and Raymond James (12%).

12. Bankrate. National HELOC Interest Rate Trends from Bankrate Survey of Large Lenders. Rate was calculated using a loan or line amount of $30,000, with a FICO score of 700 and a combined loan-to-value ratio of 80%. January 2024.

13. Bankrate. Best Personal Loan Rates for January 2024. Lowest APR range for a loan up to $100,000 (Minimum Credit Scores: 695) .

14. Minimum requested amount must be $75,000.00 or such greater amount as may be proscribed from time to time pursuant to 12 C.F.R. Section 1026.3(b) of Regulation Z issued by the Consumer Financial Protection Bureau as the minimum threshold necessary to qualify the Line of Credit as an exempt consumer credit transaction thereunder.

15. The Bancorp Bank, N.A. does not charge an application fee. State, local, and/or third-party fees may apply in some states.

16. Clients should consult with a tax professional regarding potential tax implications involving the investment portfolio.



REQ0005973 - SBLOC-A