Securities Backed Line of Credit | International Franchise Association

Securities Backed Line of Credit


A line of credit backed by securities held in an investment portfolio. This type of loan is similar in concept to a home equity loan, but rather than the loan being backed by the equity in your home, it is backed by the securities held in your investment portfolio.  

How it works: Whether you want to launch a new business, expand one you already have, or utilize a bridge loan, this type of funding can provide you with the immediate funds to do so by allowing you to access the value of your investment portfolio, without disrupting your long-term investments or asset allocations, or creating unexpected tax consequences.


  • Cash needs are satisfied without selling securities/assets/investments
  • Keep your long-term investment strategy in place, with all investments remaining in your name
  • Can keep all appreciation and dividends from your portfolio
  • Easier to obtain and have lower rates than other alternatives (SBA loan, unsecured loan, and other forms of credit)
  • Avoid selling stocks and generating capital gains
  • Typically receive approval within 48 hours and are fully funded within 10 days
  • Ability to borrow between 50-95% of investment portfolio


  • Can be risky since market fluctuations could cause the value of pledged assets to decrease
  • If market value of pledged securities drops below certain levels, payment may be required, or you could be made to sell securities to maintain equity
  • Adverse tax consequences could result from selling securities


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