“Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor” — Robert J. Shiller
A Better Way to Unlock Liquidity
Securities-backed lending (SBL) offers a powerful way to access liquidity while keeping your investment strategy intact. Whether you’re buying a home, covering a tax liability, or simply avoiding the friction of traditional financing, SBL allows you to borrow against your portfolio — not sell it.
Through our arrangement with sub-advisors, we help clients implement one of the most tax-efficient and cost-effective lending strategies available today: long-dated box spread loans.
These aren’t for everyone, but for clients with large taxable portfolios and long-term growth goals, they can be a game-changer.
We don’t offer securities-backed loans as a standalone service. This strategy is available only to clients engaged in ongoing investment management or comprehensive planning with our firm.
Lending That Aligns With Strategy
Keeps Your Portfolio Fully Invested
Borrowing against your assets allows you to raise cash while staying fully invested in your long-term strategy. This means no capital gains, no missed market growth, and no need to unwind carefully constructed allocations.
Simplifies the Lending Process
The loan is secured through your investment account, with minimal paperwork and no traditional underwriting. In some cases, we may coordinate a custodian transfer to support the strategy.
Flexible Terms and Rate Options
Clients can choose fixed interest rates for up to five years or opt for a floating rate tied closely to market benchmarks. This flexibility allows the structure to match both short-term needs and long-term planning goals.
Enables Smarter Real Estate Purchases
A securities-backed loan can help finance a home, project, or large expense without selling assets. Because it’s secured by your portfolio, the process is often faster and more flexible than traditional lending.
Offers Tax-Aware Access to Capital
Interest is generally reported as a capital loss under IRS Section 1256, making it broadly deductible regardless of how the funds are used. We work with your CPA to ensure it’s implemented and reported correctly.
Alternative to Traditional Lending
Securities-backed loans often offer lower rates, broader tax advantages, and fewer restrictions than margin loans, HELOCs, or pledged asset lines — making them a flexible solution for a wide range of planning needs.
Liquidity Without Disruption
Accessing capital doesn’t have to mean dismantling your investment strategy. Securities-backed lending offers an alternative: the ability to borrow against your portfolio without triggering capital gains, interrupting compounding, or losing market exposure.
Through our arrangement with our sub-advisors, we help clients implement a modern version of this approach using box spread loans — a strategy that’s long been used by institutions but is now available in a simplified form for individuals. The result is a lending solution that’s often more flexible, more tax-efficient, and more cost-effective than traditional margin loans or pledged asset lines.
Whether you’re exploring a large purchase, a charitable gift, or just need short-term liquidity, we can help you do it without selling off your future.
Designed for High-Value Decisions
Securities-backed lending can be a powerful tool — but only when it fits into a bigger picture. We use it to support meaningful decisions: buying a second home, helping a family member, managing a concentrated position, or funding a tax-efficient gift to charity.
Because these loans are structured using index options, they’re often available at rates lower than traditional credit — with fixed-rate options, flexible repayment, and interest that may be fully deductible as a capital loss under IRS rules. That means you’re not just saving cash flow today — you’re potentially improving your long-term tax outcome too.
We’ll help you evaluate the opportunity clearly, weigh the tradeoffs, and understand how it compares to more familiar solutions like HELOCs or portfolio margin loans.
Part of a Holistic Strategy
We don’t treat this strategy as a one-off transaction. It’s integrated into everything else we’re already doing — whether that’s investment management, estate planning, or long-term retirement strategy.
That integration matters. A securities-backed loan might solve one problem, but it also touches others — tax reporting, asset allocation, risk management, liquidity buffers. That’s why we coordinate directly with your CPA, estate attorney, or mortgage lender when needed. And it’s why we build margin buffers and laddered repayment options into the plan up front, so surprises don’t derail the strategy later.
When implemented carefully, these loans can be more than a source of cash. They can be a strategic tool in your broader financial life.
Frequently Asked Questions
A securities-backed loan lets you borrow against your investment portfolio without selling your holdings or disrupting your long-term financial plan. Instead of liquidating assets and potentially triggering capital gains taxes, you use your portfolio as collateral — giving you access to liquidity while staying invested. The loan itself is structured inside your brokerage account, typically requiring margin approval and a short setup process.
We use a specific structure called a box spread, which creates a fixed payout through exchange-traded options on the S&P 500. The result is a synthetic loan with defined terms, minimal underwriting, and, in many cases, more favorable interest rates than traditional bank loans or margin facilities. This strategy has long been used by institutions and family offices but is now more accessible to individual clients.
While all three options involve borrowing against your investments, the terms, risks, and tax treatment can vary significantly. Margin loans often carry high interest rates and are prone to sudden margin calls during market downturns. Pledged asset lines (PALs), offered by custodians like Schwab, can be more stable — but typically come with use restrictions, large minimums, and less favorable tax treatment.
Box spread loans offer a more tailored alternative. You can lock in fixed interest rates for 1, 3, or 5 years, or choose a floating rate tied closely to the Secured Overnight Financing Rate (SOFR). The interest is recognized as a capital loss, not as interest income, which may offer greater tax efficiency. And unlike traditional loans, there’s no income verification, no use restrictions, and fewer administrative headaches.
There are no restrictions on how you use the proceeds. Many clients use the funds for real estate purchases, large tax payments, or bridging liquidity gaps during business transitions or investment opportunities. Because the funds come from your portfolio — not from a bank or credit application — the process is faster, more flexible, and less invasive.
The key advantage is control. You’re not forced to sell investments during a market dip or take on taxable gains just to access cash. This structure gives you the flexibility to respond to your needs without compromising the portfolio you’ve spent years building.
There are two primary options: a line of credit or a fixed-term loan. The open-ended line of credit is floating-rate, meaning the interest adjusts over time based on short-term market rates. It offers maximum flexibility and can be drawn or repaid as needed. Many clients use this option for shorter-term or less predictable needs.
Alternatively, you can choose a fixed-rate loan for 1, 3, or 5 years, locking in the interest cost for the full term. These fixed loans don’t require monthly payments — the interest accrues over time and is settled at the end. Clients often prefer fixed terms when they want predictable costs and are confident in their time horizon. We help you evaluate both options and choose what fits best with your plan.
Yes. One of the unique advantages of this strategy is that interest is recognized as a capital loss — not as ordinary interest — under IRS Section 1256. Each year, the accrued interest shows up on your 1099 as a mark-to-market loss on the options trade, typically split 60% long-term and 40% short-term.
This treatment allows for broader deductibility than traditional loans, where interest is only deductible under narrow conditions. Even if you use the funds for personal expenses, real estate, or business needs, the deduction may still apply. We coordinate with your CPA to ensure it’s reported correctly and integrated into your overall tax strategy.
The biggest risk is a margin call — if your portfolio drops significantly in value, you may be required to deposit additional collateral or unwind the loan. We help mitigate this by borrowing well below your portfolio’s capacity and modeling different market scenarios to ensure adequate buffer room.
Other risks include interest rate risk for floating loans, and execution risk during extreme market conditions (like sudden market closures or liquidity issues). That said, the structure is cleared through the Options Clearing Corporation, which has a long history of operational reliability. These loans aren’t risk-free, but they’re well understood, well managed, and carefully built into your broader financial plan.
Yes. Currently, this strategy can only be implemented through custodians that support the necessary trading and margin features — and Charles Schwab is the platform we use for this approach. If your assets are already at Schwab, the transition is minimal. If not, we’ll coordinate the move, including account setup, asset transfers, and margin approval.
This move is typically straightforward and can be completed without selling or changing your investment strategy. Once in place, the strategy integrates directly into your existing portfolio and planning process, with no need to manage a separate loan account or lender relationship.
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