How to Establish a Securities-Backed Line of Credit
What does a SBLOC do?
SBLOCs offer access to the value of your Betterment assets as a line of credit without liquidating investments. Betterment’s SBLOC is a streamlined, automated application process, and may give you fast access to funds after approval.
The Potential Benefits of an SBLOC
1. Using an SBLOC may eliminate the need to sell off portfolio assets that can trigger a taxable event.
2. Using funds from an SBLOC allows you to continue benefiting from dividends, interest, and potential appreciation, subject to market risks.
3. SBLOC loans have flexible repayment terms and are typically offered at lower rates than traditional personal loan Products; actual rates vary based on individual circumstances and prevailing market conditions.
What you could use a SBLOC for:
- Purchase/renovate a home.
- Pay inheritance/estate/income taxes.
- Finance business expenses.
- Pay college tuition.
- Manage medical bills.
- Pay for a wedding.
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How to Establish a SBLOC
1. To begin, contact your advisor and ask them to assist you in establishing a SBLOC. You can contact us directly at 785.6012 or email us at clientservices@embark-invest.com.
2. Collateral pledge: On your behalf, your advisor can pledge eligible securities held in your investment accounts as collateral. Betterment taxable accounts are available for use as collateral, including individual, joint, and trust accounts.
3. Establishing the line of credit: The Bancorp through TALEA will assess the value of the portfolio and, if approved, may extend a line of credit. The amount you are able to borrow is a percentage of pledged asset value between 50% and 95%*, depending on the assets in the pledged account.
*The Advance Rate for an all-cash portfolio is 95%
4. Accessing funds: Once the line of credit is established, you can draw from it as needed, subject to a daily withdrawal limit. Note, these funds cannot be used for the purchase of securities.
5. Repayment: Typically, a SBLOC requires payment of only the interest on the outstanding balance each month. The interest rates offered by The Bancorp are variable, tied to the WSJ Prime Rate, plus a margin. You can pay down the principal and close the SBLOC at anytime. Clients can also keep a zero balance SBLOC open at no cost to have for emergency purposes.
6. Maintaining Collateral Value: If the value of the securities drops below a certain threshold, you may receive a “maintenance call” from the Bancorp requiring a reallocation of the portfolio to increase the borrowing power, a deposit of additional funds or securities, or to repay a portion of the loan to maintain the required collateral value.
Have questions?
If you have any questions about holdings in your account or one of our models, or perhaps have another question about our services, you can contact us directly at 920.785.6012 or email us at clientservices@embark-invest.com. Betterment maintains a support line you can also call for help with navigation, linking your accounts or other site functionality. You can call the Betterment for Advisers support line at 800.400.1571.
Last updated July 1, 2025
Disclosures: Content contained herein is presented for informational and educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of individualized investment, tax, or legal advice.
Borrowing against investment accounts involves risks, including the potential for loss of pledged securities if loan obligations are not met. You should carefully consider your financial circumstances, investment objectives, and risk tolerance before establishing an SBLOC.
Use of SBLOC proceeds is subject to applicable lending terms and restrictions. SBLOCs cannot be used for the purchase of securities.
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