Business Financing Using a Securities Line of Credit

Like most financing, business financing has been hard to come by in the past couple of years. Both new and existing businesses are being denied loans by lending institutions; new businesses are being denied for lack of experience in the related field, and existing businesses are being denied due to strict financial and credit requirements for existing businesses.

The Small Business Administration (SBA) agency was created by the Government to help disburse subsidized business loans, making it easier for banks to approve loan applications. But even with the SBA subsidies, borrowers are still hearing from the banks that they do not qualify. Furthermore, all SBA loans require a personal guarantee, usually in the form of a large asset, from any applicant who owns at least 20% of the small business.

The shortage of necessary financing can require borrowers to tap into their savings accounts or liquidate their assets such as stocks, bonds or mutual funds. Rather than selling off assets to start or expand a business, Covenant Financial Group is giving entrepreneurs the opportunity to leverage their existing portfolios with a Securities Based Line of Credit (SBLOC). Leveraging instead of selling your assets allows you to stay in the market and continue to receive your dividends as well as profit from any future growth of your securities portfolio.

A Securities Based Line of Credit (SBLOC) offers interest rates as low as 1.5% variable along with the ability to lock in a fixed rate at anytime during the loan term. The interest only payments enable the borrower to see the investment into their business come to fruition before they have to start making any large loan re-payments.

Unlike traditional financing, a Securities Based Line of Credit (SBLOC) is based on the strength of the securities portfolio as opposed to the strength of the borrower’s credit or source of income. This “Limited Doc” line of credit means less paperwork, faster approvals and immediate access to cash when it’s essential.

To receive a no obligation loan quote, please complete and submit a Quote Request Form:

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