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Larry Ellison has pledged 346 million Oracle shares as collateral for personal loans. As of September 2025, those shares were worth $107 billion, an amount he uses, according to Oracle’s proxy disclosure, to fund outside personal business ventures. What he cannot do with those proceeds is buy more Oracle stock. The same rule that prevents him governs ev…

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Good morning,

This week brought significant developments in private credit, offering clear insights for those in securities-backed lending seeking timely discussion points.

The numbers that landed this week tell a specific story. $260 billion rotated out of private credit and into bond funds in Q1. Redemption requests hit $20 billion. The fund finance ma…

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If you own a meaningful position in stock or bonds and have wondered how investors get cash without selling, the phrase “borrow against your portfolio” has come up. The industry calls it securities-backed lending, o…

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Most advisors who use securities-backed lending still think of it as a tool. A small number — and the gap between the two groups is growing — run it as a practice. The difference isn’t volume. It’s whether they know, before the next review meeting, which clients in their book are SBL candidates.

If you’ve done one or two SBL deals, both of them reactive,…

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Concentrated positions are one of the most common and uncomfortable problems in wealth management.

A client built real wealth: a company exit, decades of stock grants, an inherited block of shares that’s compounded beyond anyone’s expectations. And now they…

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Hey there,

Your client has $3 million sitting in a brokerage account.

They need $800,000 for a real estate purchase.

You tell them their options are to sell shares, take out a personal loan, or wait.

None of those answers are wrong. But they’re all incomplete.

There’s a fourth option most advisors either don’t mention or can’t explain clearly enough to make it land: securities-backed lending. Today’s issue is a ground-up breakdown of exactly what it is, how it works, and what your clients actually need to understand before they consider it.

SBL 101: The Plain-Language Breakdown

What it is — in one sentence.

Securities-backed lending is a loan in which your investment portfolio serves as collateral. You borrow against what you own — without selling it. The portfolio stays invested. You get cash. The lender holds a lien on the pledged assets until the loan is repaid.

Why does it exist?

Selling a position to access cash has a cost most clients don’t fully price in: capital gains taxes, loss of market exposure, and the friction of re-entering the position later. SBL was built to solve that problem. You keep the position — and its upside — while unlocking the liquidity you need. The portfolio continues to appreciate and collect dividends while the loan is outstanding. You’re not exiting. You’re leveraging.

How much can you actually borrow?

This is where most clients have unrealistic expectations in both directions. The amount you can borrow is expressed as a loan-to-value ratio — LTV — which is the loan amount as a percentage of the collateral’s market value. The LTV you qualify for depends entirely on what you’re pledging.

Here’s what the market actually looks like:

• Investment-grade bonds: 80–90% LTV. The most stable collateral gets the highest advance rate.

• Large-cap equities — S&P 500, blue-chip names: 65–75% LTV.

• Diversified ETFs and mutual funds: 60–75%, depending on what’s underneath.

• High-yield bonds: 50–70%. The spread risk earns a discount.

• Mid-cap equities: 50–65%. Higher volatility means a lower advance rate.

• Concentrated single-stock positions: 30–50%. Single-stock risk is real, and lenders price it accordingly.

What qualifies — and what doesn’t.

Most advisors assume more clients are disqualified than actually are. Eligible collateral includes blue-chip and large-cap stocks, diversified equity portfolios, investment-grade bonds, and liquid ETFs and mutual funds. What doesn’t qualify: penny stocks under $5, thinly traded or illiquid securities, and most cryptocurrencies. Private equity is evaluated on a case-by-case basis.

The practical implication: a typical HNW client with a diversified public equity portfolio almost certainly has collateral that is pledgeable. The conversation is worth having.

The one structural question every client asks: what happens if the market drops?

This is the margin call question, and it needs a direct answer. If the value of the pledged collateral falls significantly, the lender can issue a margin call — requiring the borrower to either post additional collateral or repay part of the loan on short notice. This is the primary risk in any SBL structure, and it should be stress-tested before the facility is opened, not after.

The way to manage it: build in a collateral buffer by borrowing well below the maximum LTV, model the drawdown scenario before committing, and ensure the client understands the cure timeline if a margin call comes in.

What it costs.

SBL facilities are typically interest-only with no fixed amortization schedule — meaning the borrower pays interest on the outstanding balance and repays principal on their own timeline. Most facilities carry variable rates tied to a benchmark like SOFR, which means the cost moves with the rate environment. There’s also an important tax note: interest expense deductibility depends on what the proceeds are used for and varies by jurisdiction. That’s a conversation for tax counsel, but it should happen before closing, not after.

Moving Forward

SBL is not the right answer for every client. It’s the right answer for clients who have pledgeable assets, a clear use for the capital, and an honest understanding of the risk of margin calls. Bridge financing, a real estate purchase, and a tax-planning window around a liquidity event — these are the use cases where the structure genuinely earns its place.

Next week, we’ll break down the non-recourse structure in detail — what it actually means, why it matters for asset-protection-focused clients, and how it changes the risk profile of the conversation.

Worth Noting

• Download the SBL 101 Quick Reference — LTV ranges, collateral eligibility, and the non-recourse vs. recourse comparison on one page.

• The best SBL use cases: bridge financing, real estate purchases, and tax planning around liquidity events. The worst: speculative leverage on top of an already volatile position.

• Always stress-test the facility against a 20–30% portfolio drawdown before your client signs anything.

Have questions or a client situation you’d like to think through? Let me know in the comments.

Sydney Westrick

Founder, The Liquidity Desk

The Liquidity Desk is published for educational purposes only. Nothing in this newsletter constitutes investment, legal, or tax advice. Always consult a qualified professional before making financial decisions.

Hey there!

A founder with $10M in concentrated stock needs $3M. She sells. Before she writes a single check toward her new venture, roughly $700K has already been paid to the federal capital gains tax.

That’s not a rounding error.

That’s a seed round.

And the shares she sold? They stopped compounding the day the transaction closed. If the company doubles in…

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The problem

Wealth advisors, family offices, CPAs, and trust officers all have the same client. High net worth, asset rich, and stuck. The client needs cash, but selling triggers a tax event and breaks the plan.

Most advisors reach for one of three answers. Sell the assets. Use margin. Ask the bank. Each one carries a cost the client does not see coming.

A securities-backed line of credit is the fourth answer. Borrow against the portfolio, leave the positions invested, no forced sale. But there is no neutral intelligence on this market. Every source is a bank that wants to book the loan. The advisor ends up forwarding a brochure and hoping the rate is fair.

What this is

The Liquidity Desk is building SBLOC Intelligence as a category. Independent coverage of the securities-backed lending market: where rates are moving, how lenders are pricing, what structures are shifting, and what that means for a live client conversation.

What you get

When the cost of capital moves, you hear it here first. The Desk tracks lender rate and policy changes, with a comparison table showing what the major wire houses and custodians actually charge, including Fidelity, Schwab, Wells, Morgan Stanley, and Merrill. Nobody else publishes it.

Advisors get the investment interest deduction wrong more than any other piece of SBLOC tax treatment. The Desk works through the regulatory questions that actually come up, including IRS treatment and estate planning with a pledged portfolio.

Every institution prices and structures a line differently, and they behave differently when markets turn. Lender comparisons put those differences side by side.

Then there are the cases. A pre-IPO founder bridging a lockup. A concentration trap that ended in a forced sale. Real scenarios, walked end to end, showing what works and what breaks.

You also get frameworks built for the client meeting itself: decision trees, conversation scripts, the maintenance buffer math. Plus risk and collateral strategy, macro context for timing a draw, and a monthly mailbag on subscriber questions.

Why it matters

This is the intel an advisor needs to walk into a client conversation already knowing the answer. Not forwarding a bank brochure. Not taking the custodian’s first number. Knowing where the market is and what a good structure looks like before the client asks.

Most coverage stops at content. The Liquidity Desk reaches the decision itself: the advisors, family offices, CPAs, and trust officers whose clients are asking how to get liquid without selling.

Who writes it

I’m Sydney Westrick. I track the SBLOC market for a living: the banks, the custodians, the non-bank credit desks, the rates, and the structures each one is built to underwrite. I hold the SIE certification with the Series 65 in progress. The Liquidity Desk is where that coverage gets written down.

Reply anytime

The most useful thing you can do is reply. Tell me what lending problem you’re stuck on. I read every email.

Disclaimer

The Liquidity Desk is for educational and informational purposes only. It is not investment, legal, tax, or financial advice, and it is not a recommendation to enter into any securities-backed line of credit or other lending arrangement. Rates, lender terms, lending appetite, and program structures change frequently and vary by institution, client profile, and market conditions. Any rates or terms referenced are observed at a point in time and should be independently verified with the lender before any decision is made. Wealth advisors, RIAs, family offices, private bankers, CPAs, trust officers, and individuals use this information at their own discretion and remain solely responsible for their own due diligence and for any advice they give their clients. Securities-backed borrowing carries real risk, including the risk of a maintenance call and the forced sale of pledged assets. The Liquidity Desk is independent and is not a lender, broker, or custodian.