Blog

Advantages and Disadvantages of Securities Based Lending In a world where market timing matters and liquidity opens doors, securities-based lending has become an increasingly valuable tool for high-net-worth individuals and investors. Whether you’re looking to unlock capital without disrupting your long-term investments or seeking funding for business, real estate, or personal ventures, securities-based lending offers a flexible and tax-efficient alternative to traditional loans. Understanding Securities-Based Lending Securities backed lending (SBL) allows borrowers to use their investment portfolio—typically publicly traded stocks, bonds, or mutual funds—as collateral to secure a loan. Rather than liquidating assets and potentially triggering capital gains taxes, you can retain ownership of your investments while accessing a credit facility based on their market value. The concept is straightforward: a lender assesses the value, liquidity, and volatility of your portfolio, assigns a loan-to-value (LTV) ratio (commonly up to 65%), and provides you with a line of credit or lump-sum loan. This capital can be used for nearly any purpose—without the restrictions that often come with traditional personal or business loans. How It Works Here’s how a typical securities-based lending arrangement functions: Collateral Selection: You pledge eligible securities such as blue-chip stocks or liquid bonds. Loan Structuring: The lender evaluates the portfolio and assigns an LTV ratio based on risk. Loan Issuance: You receive a loan or revolving line of credit, often in GBP, USD, EUR, or RMB. Repayment Terms: Interest is serviced monthly or quarterly, and the principal is repaid according to the loan term (typically 36–60 months). Custody & Control: Custody often remains with a third party, and the loan is structured with or without title transfer depending on the lender. At Platinum Global Bridging Finance, we structure margin loans with recourse, allowing clients to retain economic ownership of their shares while accessing liquidity. Benefits of Securities-Based Lending

Securities as collateral | Secure Loans Against Your Collateral What Is Securities-Based Lending? Securities backed lending involves borrowing against your financial portfolio — typically publicly traded stocks, ETFs, or bonds — without liquidating them. These loans are usually structured as non-purpose, meaning you can use the funds for any lawful purpose except buying additional securities. With this form of lending, you retain ownership of your portfolio, allowing it to continue appreciating and generating dividends, while the lender takes a secured interest in the assets. Why Use Securities-Based Lending? ✅ Access Fast Capital: Receive funding in days, not weeks. ✅ No Credit Checks or Income Proof: Approval is asset-based, not income-based. ✅ Non-Dilutive: Perfect for entrepreneurs who want liquidity without giving up equity. ✅ Tax Efficient: Avoid triggering capital gains tax by not selling appreciated assets. ✅ Flexible Usage: Funds can be used for property purchases, debt restructuring, estate planning, or luxury acquisitions. How Does It Work? Assess Eligibility: Review the securities you hold — ideally blue-chip, liquid, and listed on major exchanges. Loan Structuring: Agree to terms, including loan-to-value (LTV), interest rate, and repayment schedule. Collateral Pledge: Securities are transferred to the lender or custodian under a control or pledge agreement. Funds Disbursed: Loan is issued once collateral is confirmed — often within 5–10 business days. Loan-to-Value (LTV) Ratios Asset Type Typical LTV Large Cap Stocks 50–70% ETFs 50–65% Corporate Bonds 40–60% Mutual Funds 30–50% Higher LTVs are available for portfolios with strong liquidity and diversified holdings. Common Use Cases 🔹 Business working capital or expansion 🔹 Bridge financing for real estate transactions 🔹 Refinancing or consolidating high-interest loans 🔹 Tax settlement or estate planning 🔹 Luxury asset purchases (jets, yachts, fine art) What Makes Our SBL Solutions Different? At Platinum Global Bridging Finance, we work with a network of

A Guide to Securities Based Lending For investors looking to access capital without disrupting their portfolio, securities backed lending (SBL) has become a flexible and efficient solution. Rather than liquidating investments, individuals can borrow against them—unlocking liquidity for personal or business use while continuing to benefit from market performance. Whether you’re a seasoned investor or exploring alternative finance options for the first time, this guide will help you understand how securities-based lending works, who it’s for, and how to get started. What Is Securities-Based Lending? Securities based lending allows you to borrow money by using your existing investment portfolio as collateral. Instead of selling your shares to raise cash, you pledge them to a lender who provides a loan based on the current value of your holdings. It’s a private, non-purpose loan—meaning the funds can typically be used for any legal reason, including real estate purchases, business expansion, tax obligations, or strategic investments. How It Works Portfolio AssessmentYour portfolio is reviewed for eligible securities—typically liquid, listed blue-chip stocks or mutual funds. Loan-to-Value (LTV) CalculationBased on the liquidity and risk profile of your holdings, the lender offers a loan up to a certain percentage—usually between 60% and 70% of the portfolio’s value. Loan Terms & StructureLoan terms generally range from 36 to 60 months, with interest rates from 3% p.a.. Loans are usually structured as margin loans with recourse. DisbursementOnce agreements are signed and custody is confirmed (often with a third-party custodian), funds are released—typically within 3 to 7 business days. Who Is It For? Securities-based lending is designed for: High-net-worth individuals with portfolios over £250,000 Entrepreneurs and business owners needing working capital Investors looking to access liquidity without incurring capital gains tax Property buyers who want to act quickly without mortgage delays Expats or globally mobile clients with international portfolios