Securities Based Lending
- CJM TRUST
- Securities Based Lending
Securities-Based Lending Priorities
Sometimes cash requirements arise, whether they are expected or not. With a line of credit backed by assets, you’ll have quick access to funds without having to liquidate your investments. Collateral can be provided by marketable securities, including stocks, bonds, and mutual funds. Of course, we’ll also consider how all of this fits into your overall wealth plan, weighing your short- and long-term goals to determine the best course of action for you.
SBLs: What are they?
With a securities-based line of credit, strategically obtaining access to liquidity might be flexible and reasonably priced. Whether you want to take advantage of a good investment opportunity, finance a new purchase, or make home upgrades. Using a line of credit, you can keep making investments and managing your portfolio. Other common usage include:
- Purchasing real estate
- Fees such as taxes
- financing for special assets such as stadiums, artwork, or yachts
Benefits of Securities-Based Lending for Your Investments
- Remain devoted. Keep your investing strategy and asset allocation the same; don't alter your long-term strategy.
- adaptable expenditure. You can use fast access to money for many things, like meeting big-ticket expenses or taking advantage of business opportunities.
- economical. You just pay interest on the money you use, which is typically cheaper than other financing options. There are no upfront expenses.
Understanding the risks associated with borrowing is essential before making any investment decisions. Uncontrollable events, such developments in the market that could reduce the value of your pledged securities, may result in a margin call. Here we are.
How SBLs Operate
As a customer, you have the option to borrow the entire Lending Value of the securities in your account. A Lending Value, which is a percentage of each asset’s market value, represents the amount that CJM TRUST KB is willing to lend against a security. Lending Values are subject to change at any time and without notice.
Lending Value may fall under one of two categories:
- Initial Lending Value (ILV) is the maximum amount that can be borrowed against your portfolio. ILV has an impact on your ability to discharge or exchange collateral as well as how much of your line you may draw from.
- How much equity you are required to maintain in your portfolio in the event that collateral is not released or replaced is specified by the Maintenance Lending Value (MLV).
