Advisor Flipbooks

securities-backed line of credit (sbloc) for financial professional use only. Eligibility requirements To qualify for an SBLOC, the securities within your client's portfolio must meet the following eligibility requirements. Equity securities and mutual funds must › › Be traded on a major exchange market: NYSE, AMEX or NASDAQ › › Have an available daily market price › › Have a share price above $2 › › Have satisfactory, restriction-free market liquidity › › Have no restrictions on transfer › › Not be a security issued by The Bancorp Bank Similarly, fixed-income securities must › › Be assigned an investment-grade credit rating › › Have satisfactory market liquidity › › Have no restrictions on liquidation or transfer › › Not be a security issued by The Bancorp Bank Determining the interest rate SBLOCs feature a tiered interest rate structure determined by the outstanding loan balance. The tier reflects a margin either above, equal to, or below the Prime Rate as published in The Wall Street Journal. There is no charge for the unused portion of the line of credit. Determining the credit limit Your client's credit limit will be based on the value and type of the underlying collateral in their portfolio. The limit itself is determined by multiplying the collateral value by the "Advance Rate" associated with the security class. Note that the advance rate applies to individual securities and mutual funds falling within the specific asset class. Lines backed by portfolios allocated across asset classes will be assigned blended advance rates. Asset Class Advance Rate Equities 50% Investment-grade fixed income 80% Treasuries 90% Cash and equivalent 100% SBLOCs are offered starting at a $75,000 minimum based on the above advance rates. How to access the SBLOC Check writing If your client elects to receive checks, their first order should arrive within 7-10 business days. Wire transfers Your client may transfer funds from their SBLOC by submitting a completed Domestic Wire Transfer Request form; domestic wire transfers associated with an SBLOC are free of charge at The Bancorp Bank.

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