August 05, 2016
Do you need to pay taxes, manage short-term cash-flow needs or address another critical financial situation — and, at the same time, avoid liquidating your assets? If the answer is yes, you may want to consider liquid asset secured financing as an option. Liquid asset secured financing lets you leverage assets in one or more investment accounts without liquidating the investment.
This line of credit offers flexibility and liquidity, particularly in regard to financial opportunities that can arise at the last minute, such as the chance to win a bid for a second home, according to Kristine Knight, Private Banking Managing Director for The Private Client Reserve of U.S. Bank. In addition, the line of credit may give you better control over your finances.
“In essence, this is how it works: The investor’s investment portfolio is used as collateral against a loan,” Knight says. “There is very little set-up cost, turnaround time can be very quick, and interest rates can be much more attractive than other types of short-term financing. Plus, assets can be liquidated quickly, if necessary.”
Additionally, Knight notes, “Monitoring occurs daily, so if there’s any market fluctuation, it would be detected immediately.”
Consumer and Commercial
Liquid asset secured financing can benefit both consumer and commercial clients.
“Not-for-profit organizations are putting these types of facilities into place,” Knight says.