Introducing the Securities Based Line of Credit

Flexibility is the motto for a new lending tool that Raymond James plans to unveil this fall, the Raymond James Securities Based Line of Credit.

It's a flexible line of credit that recognizes clients' overall relationship, allowing them to borrow against eligible assets in pledged accounts gaining access to an alternative source of liquidity. The increased borrowing power and highly competitive pricing should appeal to advisors and clients alike, explains Doug Brigman, director, Wealth Solutions, at Raymond James. "It gives advisors another tool to provide a more holistic wealth management approach, especially with their high-net-worth clients, by assisting them with their liquidity needs, whether it's for personal use or as quick capital for a small business owner."

Here's a closer look at what makes the Securities Based Line of Credit a unique — and appealing — product:

• Offers low-cost borrowing power. The interest rate charged on a Securities Based Line of Credit is likely to be substantially lower than other traditional lending sources. And the greater the total Raymond James account balances pledged as collateral, the more attractive the borrowing terms; rates will vary based on the market value of pledged assets.
• Easy to establish, with a short application and no fees for opening the loan or accessing funds. The minimum requirement is $250,000 of the market value of the pledged account(s), with a $55,000 minimum initial withdrawal.
• Access it with virtually no restrictions on how the proceeds are used (although it cannot be used to purchase additional securities). Clients get a checkbook to access funds and can establish a repayment schedule and amounts on terms that are convenient for them. Loan payments are interest-only and due monthly. However, interest can be rolled with the loan, as long as the collateral value permits.
• Maintains investment strategies intact. Clients still have the ability to buy, sell and trade just as they normally would. Clients will continue receiving interest and dividends on pledged accounts.

To learn more about Raymond James' new Securities Based Line of Credit, visit the Cash & Lending Solutions team in the Resource Center.