The Benefits of Financing a Business with Your Stock Portfolio

If you’re a small business or franchise owner seeking business financing, don’t resort to selling your stocks, bonds or mutual funds right away. By leveraging those assets rather than liquidating, you can gain access to fast funding with low interest rates — a winning combination.

Portfolio loans (also called stock loans or securities-based lending) allow you to tap into the value of your assets to invest in a venture you’ll control, whether it’s business-related or not. You can borrow up to 80 percent of the value of your portfolio and pay interest only on the amount you use. What’s more, you can use this revolving line of credit wherever and whenever you need it — there are no spending restrictions.

By enlisting the help of a company specializing in portfolio loans, you’ll be able to obtain one quickly and easily. Most stock loans close within 10 days and boast interest rates as low as 3 – 4 percent, which are lower than what you’ll find with many other forms of business financing. Plus, the one-time cost of setting up the loan can be included in the total loan amount, so you won’t have to pay any money out-of-pocket.

If you have at least $85,000 in a brokerage account, in addition to securities that are trading at $5 per share or more, you could qualify for a portfolio loan of $55,000 or more. Of course, the more your securities are worth, the more you’ll be able to borrow. Stock loans can also be used in combination with other methods of small business financing, including 401(k) rollovers, SBA loans and unsecured loans, to help you attain your total funding objective.

Portfolio loans offer a fast, flexible and low-cost form of small business financing. Whether you’re just beginning on the road to entrepreneurship and you need money to cover start-up costs or you just need that extra financial boost before you generate profits, a portfolio loan can make reaching your financing goals easier.

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