Plain English
Securities-based lending is the broad category of loans where publicly-traded securities (stocks, bonds, mutual funds) serve as collateral. Includes SBLOCs, margin loans at brokerage accounts, and pledged-asset credit lines at private banks.
How it actually works
The mechanics across these products are similar: you pledge a portfolio of marginable securities, the lender extends credit up to a percentage of value, and you owe interest on what you draw. The differences are in rates (private bank lines are usually cheaper than brokerage margin), use restrictions (some SBLOCs cannot be used to buy more securities), and margin-call mechanics (faster on brokerage margin, more flexible on private-bank lines).
What it means for you
For HNW members with traditional portfolios, securities-based lending is the structural alternative to selling. The math compounds with the buy-borrow-die framework: borrow at single-digit rates against assets compounding at higher rates, never realize gains, step-up basis at death.
The curriculum compares securities-based lending and crypto-collateralized loans side-by-side — helping members decide which collateral type to deploy for which purpose.
Educational content only. Not investment, tax, or legal advice.