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Financial planning

Overview

Securities Based Lending


Email:
SBLleads@fnb.co.za

Examples of accepted collateral


  • Listed shares
  • Unit trusts
  • Off-shore shares
  • Bank guarantees

Facility terms


There are a number of repayment options to suit the client's requirements. The most commonly used repayment options are:

  • Interest only bullet repayment

    The full facility is available over the full term. Monthly interest and fees must be serviced and the loan amount is settled at the end of the facility.

  • Interest roll up bullet repayment

    The full facility is available over the full term. Monthly interest and fees only need to be serviced when the approved credit utilisation limit is exceeded. The loan amount is settled at the end of the facility.

Margin call


The Bank will monitor your share portfolio on a daily basis to ensure your investment strategy works for you. In order to prevent the portfolio from major deprecation, should the portfolio fall by more than 15% a margin call breach will be triggered which will require top-up collateral to be provided. This will also allow you to adjust your asset allocation and strategy.

What it is


The use of the proceeds of a Securities Based Lending loan is unrestricted with proceeds typically used to:

  • Fund real estate
  • Refinance high interest debt
  • Finance business opportunities
  • Fund higher education
  • Purchase luxury items
  • Acquire a second investment portfolio

The beauty lies in the flexibility of this product to finance short-term requirements without disrupting long-term equity market strategies.

Assets you can use


The following movable assets can be used as collateral:

  • Cash
  • Listed shares
  • Unit trusts
  • Local cash investments
  • Preferential shares
  • Exchange traded funds (EFTs)
  • Real estate investment trusts (REITs)
  • Government bonds
  • Offshore investments (these will be evaluated on a case-by-case basis to determine acceptability

Can I continue to trade on my portfolio?


Portfolios ceded against Facilities are generally on a non-discretionary basis and are held with a long term view. As a result trading on a ceded portfolio will not be permitted without the prior written consent of the bank. The consent of which shall not be unreasonably withheld.

Margin call


A margin call is applicable if your portfolio drops below 85% of the initiation value. You will then be required to either increase your security or decrease your facility, thereby restoring your facility to the original loan-to-value.

How much you get


A full credit review of the amount of money you'll qualify for is entirely based on the diversity, liquidity, serviceability and market value of your portfolio.

The loan to value amount is largely dependent on the diversity of your portfolio.

  • Up to 30% on a single counter portfolio consisting of non-Top 40 shares
  • Up to 50% on a single counter portfolio consisting of Top 40 shares
  • Up to 50% on a balanced portfolio provided there are a minimum of five counters
  • No counter has more than a 25% weighting
  • No more than 70% of the counters are in one industry.

Access to liquidity


Quick and simple access to funds without having to sell securities, while maintaining participation and appreciation of the investment portfolio. Receive access to an alternate source of funding for property finance or to finance your lifestyle needs. The loan is customised around your repayment, amount, time frame and collateral structures.

Diversify portfolio


A key pillar to any wealth preservation strategy is diversification. Through the Securities Based Lending solution, you could further increase your shares portfolio that is unrelated to your main line of business, thus not only allowing you to use the power of gearing but also diversify your returns away from your main line of income.

Another benefit is the gearing of securities yet to be acquired with the loan proceeds for both local and offshore investments.

Increased investment exposure


If utilised correctly the power of gearing provides higher returns on your share portfolio than if you were to not use the power of gearing. This will assist you with all upside potential accruing to your portfolio.

Access to specialists


Securities Based Lending will provide you with a Wealth Manager or Fiduciary Specialist to help you identify and create your target share portfolio for potential gearing.

Ideal for quick access to inexpensive funds


With no restrictions on what the loan can be used for, Securities Based Lending is the ideal vehicle to access liquidity, simply by using collateral such as cash, listed shares; unit trusts; local cash investments; preference shares; exchange traded funds (ETFs); real estate investment trusts (REITs); government bonds; guarantees, & offshore investment.

This form of lending provides flexibility and gears share investors towards creating or sustaining wealth without disrupting the set long-term investment goals.

Securities Based Lending


Access liquidity without selling your investments


What this is


Ideal for quick access
to inexpensive funds

This form of lending provides flexibility and gears share investors towards creating or sustaining wealth without disrupting the set long-term investment goals.

Benefits


How much you get


Funds arranged with minimal paperwork


A full credit review of the amount of money you'll qualify for is entirely based on the diversity, liquidity, serviceability and market value of your portfolio.

Assets you can use


Assets as collateral


The following movable assets can be used as collateral:

  • Cash
  • Listed shares
  • Unit trusts

Fact sheet


Additional considerations

Can I continue to trade on my portfolio?

Portfolios ceded against facilities are generally on a non-discretionary basis and are held with a long term view.

Getting it made easy


Securities Based Lending