Learn how much you can borrow with securities-based lending, including typical LTV ranges, portfolio requirements, and funding amount examples. Most lenders set borrowing limits as a percentage of eligible collateral value (loan-to-value, or LTV).
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
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.