Securities-based facilities typically advance 50-75% LTV against eligible portfolio value, with diversified investment-grade portfolios at the high end and concentrated or volatile holdings at the low end. A $500K diversified portfolio at 60% supports roughly $300K; $2M at 65% scales to about $1.3M; $5M at 70% reaches $3.5M. Total facility range runs from $10,000 to $25M+. Borrow well below the maximum to absorb market drawdowns without triggering collateral calls.
How Much Can You Borrow with Securities-Based Lending?
Most lenders set borrowing limits as a percentage of eligible collateral value (loan-to-value, or LTV). Your limit depends on:
- Portfolio value
- Asset type and quality
- Diversification
- Volatility profile
- Liquidity of pledged assets
Typical Loan-to-Value (LTV) Ranges
Many facilities are sized between 50% and 75% of eligible portfolio value, with higher-quality diversified portfolios generally receiving stronger advance rates.
Example Scenarios
Example 1: $500,000 Diversified Portfolio
At 60% LTV, potential credit facility size is approximately $300,000.
Example 2: $2,000,000 Diversified Portfolio
At 65% LTV, potential credit facility size is approximately $1,300,000.
Example 3: $5,000,000 Highly Diversified Portfolio
At 70% LTV, potential credit facility size is approximately $3,500,000. Actual approved capacity will vary based on underwriting and asset composition.
What Determines Your Advance Rate?
1. Asset Type
Investment-grade assets usually receive higher advance rates. Eligible assets often include publicly traded stocks, ETFs, mutual funds, and investment-grade bonds.
2. Portfolio Diversification
More diversified portfolios generally reduce lender risk and can improve borrowing flexibility.
3. Market Volatility
If pledged holdings are highly volatile, lenders may lower advance rates and apply tighter risk controls.
4. Liquidity of Assets
Assets with stronger daily market liquidity generally support higher borrowing potential.
Typical Loan Amount Range
Securities-based lending facilities commonly range from $10,000 to $25,000,000+, depending on collateral size and lender structure.
Revolving vs Term Structure
Most SBL facilities are structured as revolving lines, but term structures can also be used for defined use-cases. Borrowing capacity can fluctuate as portfolio value changes.
Important Considerations: Borrow Conservatively
- Do not borrow at maximum threshold if avoidable
- Maintain collateral diversification
- Plan for market volatility and rate movements
Why Borrowing the Maximum Is a Mistake
The most important number in securities-based lending isn't the maximum you can borrow — it's the amount you should. Because your collateral is a portfolio that moves with the market, the gap between what you borrow and your approved limit is your safety cushion. Borrow the full 60–75% and a normal market pullback can push your loan-to-value past the threshold and trigger a collateral call, forcing you to add assets or sell at the worst possible moment. Borrow closer to 30–40% of portfolio value and your holdings can fall by a third or more before the LTV even approaches the line. A simple way to think about it: decide how large a market drop you want to survive without a call, then size your draw so that drop still leaves you under the threshold. The line's flexibility means you can always draw more later if markets are calm — but you can't easily un-borrow during a crash.
A Worked Example
Take a $2,000,000 diversified portfolio approved at 65% LTV — about $1.3M available. Borrowing the full $1.3M leaves essentially no cushion: a ~10% portfolio decline can breach the threshold. Borrowing $700,000 instead (about 35% of portfolio value) means the portfolio could fall roughly 45% before the LTV reaches the same point — the difference between sleeping soundly through volatility and fielding a collateral call. Same facility, same rate; only the draw discipline changed. Figures are illustrative, not a quote.
Frequently Asked Questions
How much can you borrow with securities-based lending?
Facilities typically advance 50–75% LTV against eligible portfolio value, with diversified investment-grade portfolios at the high end and concentrated or volatile holdings at the low end. Total facility range runs from $10,000 to $25M+.
What LTV does securities-based lending offer?
Typically 50–75%. For example, a $500K diversified portfolio at 60% supports about $300K, $2M at 65% about $1.3M, and $5M at 70% about $3.5M.
What determines your advance rate?
Portfolio diversification, the liquidity of holdings, and their volatility. Diversified, investment-grade portfolios get the highest advance rates.
Should you borrow the maximum on a securities-based line?
No. Borrow well below the maximum to absorb market drawdowns without triggering a collateral call.
Final Thoughts
Securities-based borrowing capacity is dynamic and collateral-driven. Most borrowers can access roughly 50% to 75% of eligible portfolio value, but conservative structuring is key. Review current securities-based lending options to estimate practical borrowing levels.
Frequently Asked Questions
How much can you borrow with securities-based lending?
Facilities typically advance 50-75% LTV against eligible portfolio value, with diversified investment-grade portfolios at the high end and concentrated or volatile holdings at the low end. Total facility range runs from $10,000 to $25M+.
What LTV does securities-based lending offer?
Typically 50-75%. For example, a $500K diversified portfolio at 60% supports about $300K, $2M at 65% about $1.3M, and $5M at 70% about $3.5M.
What determines your advance rate?
Portfolio diversification, the liquidity of holdings, and their volatility. Diversified, investment-grade portfolios get the highest advance rates.
Should you borrow the maximum on a securities-based line?
No. Borrow well below the maximum to absorb market drawdowns without triggering a collateral call.