By borrowing against your portfolio rather than from it, you avoid the risk of incurring capital gains tax, disturbing your strategic asset allocation or selling out of the market at the wrong time.

-Delana Burnett, Lending Product Manager PNC Wealth Management®

If you need to make a college tuition payment, pay a big tax bill, or jump on a business opportunity before it gets away, your first impulse might be to write a check or to sell off some of your investment holdings. But the former move may put your short-term liquidity at risk and the latter may throw your long-term investment strategy off course.

A way to avoid either trap is to borrow the money you need against the value of your portfolio. That’s the idea behind securities-based lending, whereby investors take out a line of credit using their investments as collateral. This type of borrowing is often faster and more cost-effective than other alternatives.

A borrowing tool with unique benefits

“For common borrowing needs, like a home renovation project or any of the examples mentioned above, you could use other assets to secure a line of credit, such as the equity in your home. However, what differentiates securities-based lending is its combination of flexibility, versatility and convenience,” notes Delana Burnett, Lending Product Manager, PNC Wealth Management®. “That’s why we offer clients the Quick Link Portfolio (QLP) line of credit.”

“The application and approval process for the QLP line of credit is easy and quick compared to traditional loans, and requires minimal documentation or paperwork,” she says. “Interest rates are competitive and there are no set-up costs or account fees.” Once the line of credit is in place, you can use it as demands for cash arise — or not use it all, but take comfort in knowing it’s there in case you need it some day.

Perhaps the most compelling benefit of this tool is it puts an additional source of cash at your disposal while keeping your holdings intact. “By borrowing against your portfolio rather than from it, you avoid the risk of incurring capital gains tax, disturbing your strategic asset allocation or selling out of the market at the wrong time,” notes Burnett. “You put the power of your portfolio to work for you while allowing your holdings to continue to grow.”

Other applications for the QLP line of credit include investing in real estate, buying into a professional practice, or financing a luxury purchase. Burnett says, “We recognize our clients have complex needs that require innovative financing solutions and the QLP line of credit is a creative way to access liquidity while offering other key benefits.”

A better way to meet business expenses

“If you own a business, a QLP line of credit can provide a more efficient way to manage day-to-day expenses, like payroll and overhead, purchase inventory and maintain cash flow,” says Burnett. “You could also use it for longer-term business needs, such as real estate acquisitions or business expansions.” There is no maturity date or fixed repayment schedule: If you carry a balance, you will be invoiced interest monthly, but you have the option of repaying some or all of the outstanding principal at any time. As a result, you have greater flexibility than a term loan would afford.

As there’s no charge to set up and maintain a QLP line of credit, there is little downside to opening one up. However, since your investment account collateralizes the line and your account may be subject to margin call, it’s important to consult your Banking Advisor about your borrowing strategy. “Often individuals will establish a line of credit with no explicit need in mind,” says Burnett. “Then, three months later something will come up and they benefit from already having a line of credit available. This strategy gives them greater peace of mind, as they know where they can source their liquidity when they need it.”

Quick Link Portfolio Line of Credit Requirements

  • Assets must be held in a PNC Wealth Management Investment Management or Custody Account, or at the discretion of the borrower, in a PNC Investments account. Irrevocable Trusts are not eligible.
  • Requires a review of your credit report and FICO credit score, and validation of the fair market value of your eligible assets.
  • Non-expiring, cancellable note with annual reviews.
  • Interest only, invoiced monthly.
  • Up to $20 million or 50 percent of the current fair market value of your eligible assets – whichever is less.
  • Funds may be used for a wide range of purposes – but not to purchase investment securities or repay margin debt.

For more information, please contact your PNC Advisor, call 888-749-2854 or, fill out our simple form to request an appointment with one of our PNC Wealth Management Professionals.