If you need a quick lending solution that will give you access to funds at an attractive interest rate, then securities-based lending (SBL) might present a solution tailored to your needs. SBLs allow you to use your investment portfolio as collateral to gain quick and easy access to a securities-based loan. SBLs offer quick, inexpensive access to funds without having to liquidate your portfolio, which means you can continue to enjoy returns and capital growth. SBLs give you flexible financing and structuring options, and the freedom to deploy the loan as you see fit.
Hayden Giger, Product Head at FNB Home and Secured Lending says, “This solution is unique, as it allows you to borrow against your portfolio without having to break the term on your cash investments or liquidate your securities, which means that you are never out of the market. Liquidating assets to reallocate them often stalls your investment journey and might incur a tax event which becomes costly. SBLs give you flexibility to grow your investments without taking a step back. They are also a great vehicle for diversification and wealth preservation. The loan can be used for almost any purpose and is cost effective compared to traditional secured lending or the disinvestment and opportunity cost of liquidating those assets.”
This form of lending provides flexibility and gears share investors towards creating or sustaining wealth without disrupting their long-term investment goals. So, if you are looking to expand your portfolio to include an additional investment, diversify and invest into an offshore portfolio, finance new business opportunities or invest in real estate, then an SBL facility is an option worth exploring.
“A common use of SBLs is to gain offshore exposure without liquidating local assets. SBLs are also an effective solution when a client receives shares in their employer company as part of a remuneration package. They might not want to sell those shares but would ideally like a more diverse exposure to the market. An SBL will allow them to take a portion of the value of those shares and purchase further equity, resulting in a more balanced portfolio,” adds Giger.
With a range of options on what the loan can be used for, SBLs are the ideal vehicle to access liquidity simply by using collateral such as cash investments, listed shares, unit trusts, preference shares, exchange traded funds (ETFs) real estate investment trusts (REITs), government bonds, guarantees, or certain offshore investments.
And, because the loan is collateralised by your portfolio, you can access interest rates as low as prime minus 1% and benefit from flexible repayment options. You will also get access to funds within 48 hours of signing the loan terms and conditions.
“Whether you want to further your investment opportunities, diversify your investment portfolio or cover any expenses, make your assets work for you with FNB’s securities-based lending solutions. Speak to your financial advisor or dedicated Private Bank advisors who will help you understand the full range of SBL options available to you,” concludes Giger.
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