Securities-Backed Line of Credit


Applying for an SBLOC 
Benefits of the SBLOC
Collateral Eligibility Guidelines
Advance Rates
Interest Rates
SBLOCs for Entities
SBLOCs for Trusts
Accessing SBLOC Funds
Payments and Payoffs
Additional Disclosures

 

 

Applying for a Securities-Backed Line of Credit (SBLOC)

The Bancorp is excited to introduce Talea™, our new loan automation platform that improves the origination and delivery of the Securities-Backed Line of Credit (SBLOC).

Talea (ta•LAY•a) is a portal to the future of wealth lending services, and The Bancorp is pleased to bring this premier solution to our valued partners and their advisor networks.

In Case You Missed It 
The Talea User Experience webinar, presented by The Bancorp, is now available for replay here. Learn how Talea helps you work smarter and faster when creating new loan packages for your clients.

To access Talea, use the single sign-on-enabled link available on your Advisor Desktop home page in the ‘Quick Links’ dropdown.  Talea is for new applications only. For modifications to an existing SBLOC, complete a Change in Terms form.

To create a paper Application in Talea, use the single sign-on-enabled link available on your Advisor Desktop home page in the ‘Quick Links’ dropdown and follow the instructions below:

  • From the TALEA Home screen, click BEGIN under NEW LOAN PACKAGES, then click CREATE A NEW LOAN PACKAGE
  • Verify your information, then click NEXT (➜)
  • Enter a reference name for the package and select the loan structure, then click NEXT (➜)
  • Select "Present a Hardcopy" and “Financial professional on behalf of all borrower(s)”, then click NEXT (➜)
  • Review inputs, then click SUBMIT
  • Click OPEN PACKAGE and prepopulate the application, review inputs, then click SUBMIT
  • Click PRINT & UPLOAD LOAN PACKAGE(S), then click GENERATE LOAN PACKAGE(S)
  • Download the Package PDF and present to your client for physical signature

Highlights of the Talea process flow:

  • The financial professional/admin initiates the loan via Talea, and the financial professional/admin/client completes questionnaire process.
  • Once submitted by the financial professional/admin, Talea routes the loan application to the client for approval and signature.
  • The Bancorp receives, via DocuSign, the loan application/document package from the client with the client signatures.
  • The Bancorp will complete the underwriting process and book the loan.
  • Your client will then receive two Welcome letters/emails with a password and user ID (separated for security reasons) and detailed instructions for logging into, www.seicashaccess.com.
  • After a loan is established, statements are produced monthly only if there is an outstanding balance on the line of credit account. Click here to see a sample.

Online Account Access: Your client's user ID for online account access is provided in the Welcome Kit. If this is your client's first account being serviced by The Bancorp Bank, the password will be sent by email, provided an email address was included on the SBLOC application; otherwise, the password will arrive separately by U.S. mail.

If your client currently has another account being serviced by The Bancorp Bank, they will log on to our website at seicashaccess.com with the same user ID and password used for the other account. The other account may be with SEI Cash Access or another organization which offers banking services through The Bancorp Bank. The client will not receive new login credentials for this account nor will they be prompted to change the password.

Checks: If checks were chosen at the time of application, they will arrive in the mail within 7-14 business days.

 

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Benefits of the SBLOC

A Securities-Backed Line of Credit (SBLOC) offers clients flexibility and convenient access to their funds. An SBLOC is a revolving line of credit secured by the assets in the SEI portfolio. The SBLOC lets your clients access the value of their investment portfolio without disrupting your carefully constructed investment strategy.

An SBLOC is ideal for clients who need access to funds for real estate purchases, tuition payments, taxes or other large expenses – anything except the purchase of additional securities. Since the portfolio is held as collateral, your clients may avoid potential tax consequences associated with liquidating assets while you continue to maintain management of the portfolio.  Clients are advised to consult with a financial/tax professional regarding potential tax implications involving their investment portfolio.

Applying for an SBLOC involves minimal paperwork and there are no application or set up fees1. No interest will be charged until the line is in use, and there are no annual maintenance fees for simply having the line in place. For these reasons, many financial professionals opt to proactively put an SBLOC in place for their clients as a safety net for unforeseen expenses.

SBLOC clients will receive free standard checks, if chosen at the time of application, to access their line.  Checks will arrive 7-14 business days from account opening.  Domestic wire transfers from the SBLOC are at no charge. Wire request forms are available online anytime so that clients can quickly and easily access their funds as needed.

An SBLOC can also be linked to the SEI Cash Access checking account for overdraft protection if desired. An SBLOC linked to a CAA for overdraft protection will be the first source we reach out to in the event of an overdraft. If the remaining balance of the SBLOC can support the overdraft amount, we will not pull any funds from the cash in the SEI portfolio. Please note that if overdraft protection is in place and the SBLOC does not support the overdrawn amount, the item will follow the normal overdraft process.

1The Bancorp Bank does not charge an application fee. State, local, and/or third-party fees may apply in some states.

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Collateral Eligibility Guidelines

Advance Rates

Interest Rates

Current Rate Schedule (As of 09/27/2020):
Rates subject to change

COMMITMENT AMOUNT - VARIABLE INTEREST RATES
THREE-YEAR FIXED INTEREST RATES

COMMITMENT AMOUNT - VARIABLE INTEREST RATES
The interest rate on a client’s securities-backed line of credit may vary based on the maximum drawing power of your client’s loan (commitment amount) at the time of application, and is calculated using the sum of the Wall Street Journal Prime Rate (WSJP) and the margin set out below.  Changes to the Total Commitment Amount of your client's loan may result in a change to their interest rate*.

Commitment Amount
(Maximum Draw)                                 

Rate Calculation              

  Floor     

$75k - 99,999.99

WSJP - 0.25%      

  None

$100k - 249,999.99

WSJP - 0.25%

  None

$250k - 499,999.99

WSJP - 0.50%

  None

$500k - 999,999.99

WSJP - 0.75%

  None

$1MM+

WSJP - 0.75%**

  None

*Collateral additions, subtractions, or market value changes may reassign the loan to a new rate tier in the table above. Interest rate review requests must be made in writing, using the change request form that is available on our client website.  
**Negotiated pricing based on supporting documentation of competing offer.


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THREE-YEAR FIXED INTEREST RATES
There is also a fixed interest rate option available for a securities-backed line of credit. Fixed rates are available for a three-year period; any loan balance remaining at the end of the three years will convert to a variable interest rate. Both new and existing borrowers* may take advantage of the fixed rates, which are detailed below. As with variable rate loans, the interest rate tier is determined by the maximum drawing power of your client’s loan (commitment amount) at the time of application.  

Commitment Amount 
(Maximum Draw) 

Rate Calculation  

  Floor  

$75k - 99,999.99

WSJP + 1.25%

  None

$100k - 249,999.99

WSJP + 1.00%

  None

$250k - 499,999.99

WSJP + 0.75%

  None

$500k - 999,999.99

WSJP + 0.50%

  None

$1MM+

WSJP + 0.50%**

  None

*There is no fee to convert an existing securities-backed line of credit carrying a variable interest rate into a fixed interest rate. There is a $500 fee to convert an existing fixed interest rate securities-backed line of credit to a variable rate or to lock in a new fixed rate schedule prior to the completion of the current 3-year term.
**Negotiated pricing based on supporting documentation of competing offer.

PLEASE NOTE: Your clients have the ability to revolve their credit line, giving them the flexibility to draw and repay the line without early repayment penalties throughout the three-year period. There is no minimum draw amount and there is no time limit to make an initial draw on the line.



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SBLOCs for Entities

Entity SBLOCs are subject to additional review and underwriting. SBLOC requests for an entity are underwritten and processed by a commercial lender and will require additional disclosures and Loan Committee approval. Owners of the entity will be required to personally guarantee the debt. Interest rates may vary so we encourage you to contact us to discuss your client’s specific circumstance.  

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SBLOC for Trusts

There are additional components of the SBLOC account-opening process when trusts are involved that financial professionals need to know.  Following the guidelines outlined in the Quick Card for Trusts can help expedite account opening and activation.

Trustee Certification/Affidavit for SBLOCs

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 Accessing SBLOC Funds

There are a variety of ways a client can access a Securities-Backed Line of Credit (SBLOC).

Check Writing 
Clients can write a check from their line of credit checkbook.  Funds must be available on the SBLOC to satisfy the entire check amount.

Wire Transfers 
Funds can be transferred from an SBLOC account by submitting a completed Wire Request Form for Securities Backed Line of Credit (Domestic & International). Domestic wire transfers from the SBLOC are free of charge. See Schedule of Fees for International wire fees.

 

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Payments and Payoffs

Payment Options
Clients can make monthly interest payments or additional principal payments at any time in the following ways:

By ACH
Interest payments can be automatically debited from the client’s external checking account.  Please complete the ACH Loan Payment form

By Wire Transfer
Instructions: The Bancorp Bank
Wilmington, DE 19809
ABA Number 031101114
Account Number 001119100
Account Name:  Loan Operations
Reference: FBO Account Title/Loan Account Number

By Check
Please make check payable to The Bancorp Bank 

Mail to: The Bancorp Bank
Attn: Loan Operations
409 Silverside Road, Suite 105
Wilmington, DE 19809

IMPORTANT:
Please specify on the check memo line or on the wire transfer form (Part 2: Reference) how the additional payment should be applied to the loan account:  

  • Regular payment
  • Regular payment plus additional principal payment
  • Principal payment
  • Payoff and keep account open
  • Payoff and close account 

By Interest Capitalization
Clients have the option to capitalize the interest on their line of credit. Instead of paying the monthly interest on the line, clients can authorize us to capitalize the interest payment, adding it to the loan principal. Note: This may significantly increase the overall cost of borrowing. You should discuss this option thoroughly with clients.

Interest Capitalization Form 

For any questions about payments, please call the help line.
 

Payoff Instructions
A client can request to have their loan account paid off in full and closed.  For more information or to get a payoff quote, please call the help line.

 

Additional Disclosures

The Bank may reduce the credit limit if, in its sole discretion, it determines that the value of the collateral is no longer sufficient to support the line of credit. For example, if market fluctuations produce a significant loss of value in the collateral account or if the reallocation of assets from an asset class with a higher advance rate to one with a lower advance rate results in insufficient collateral value, the credit limit will be reduced accordingly.

The securities used for collateral are restricted. Approval is required for certain transactions.

The terms, loan structure, and pricing of the SBLOC Program are subject to change upon The Bank’s discretion.

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This SEI Cash Access Account service is made available by SEI Investment Company to its custodial clients. Banking services are provided by The Bancorp Bank, Member FDIC, which is not affiliated with SEI Investment Company or any of its other subsidiaries. © 2009-2016 SEI

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