Every major brokerage sells the same loan. Fidelity calls it a securities-backed line of credit (SBLOC). Charles Schwab Bank calls it a Pledged Asset Line (PAL). Morgan Stanley calls it a Liquidity Access Line (LAL). Strip away the branding and it is one idea: borrow against the value of an investment portfolio instead of selling it, using the portfolio itself as collateral. The industry's generic term for the whole category is securities-based lending, or SBL.
This is not a small or niche market. As of the first quarter of 2024, securities-based loans outstanding totaled $138 billion, or 2.7% of total U.S. consumer credit, according to a Federal Reserve staff research note. The Fed's own researchers are explicit about a limitation worth taking seriously: no single data source covers the entire universe of SBL, because it is offered by a fragmented mix of broker-dealers, banks, and non-bank lenders that report their books differently, or not at all. Any total you see, including the Fed's own, is an estimate built from partial data, not a census.
The name-decoder, in one place
No single lender's website will tell you this, because no lender has a reason to describe its competitors' products. Here is the cross-firm map:
- Product name
- Securities-Backed Line of Credit (SBLOC)
- What it's secured by
- Eligible securities in a Fidelity brokerage account
- Product name
- Pledged Asset Line (PAL)
- What it's secured by
- Eligible securities pledged from a Schwab account
- Product name
- Liquidity Access Line (LAL)
- What it's secured by
- Eligible securities in a Morgan Stanley account
- Product name
- Margin loan
- What it's secured by
- Securities held directly in the margin account
- Product name
- Securities-based line of credit, or a house brand name
- What it's secured by
- Eligible securities in the affiliated brokerage or custody account
The mechanics across these are similar enough that "SBL" is a fair generic term for all of them. The details that actually matter, what collateral qualifies, how much you can borrow against it, and what rate you pay, vary by firm and are covered in this site's advance-rate and haircut guide.
SBL is not a margin loan, even though it looks like one
It is easy to conflate the two, and even inside the industry the language gets loose. The practical distinction: a margin loan (in the strict sense) is used to buy more securities inside the same brokerage account, and is governed by Regulation T at initial purchase and FINRA/exchange maintenance-margin rules afterward. A securities-based loan is typically a separate credit facility, often issued by an affiliated bank rather than the brokerage arm, intended for expenses outside the investment account entirely, real estate, a business, taxes, anything not restricted by the loan's own purpose test.
That purpose test is Regulation U (12 CFR 221), a federal rule that has capped the maximum loan value of margin stock at 50% of its current market value since 1974. Whether a specific SBL product counts as "purpose credit" subject to that cap, or "non-purpose credit" that isn't, is a real legal distinction with real consequences for what you can do with the money, not a technicality. This site's Regulation U guide walks through the difference in plain terms, and the SBL-vs-margin comparison covers how the two products' liquidation rules differ when a loan goes underwater.
How the rate actually gets set
Nearly every major lender in this space prices SBL the same structural way: a floating benchmark, almost universally SOFR (the Secured Overnight Financing Rate) since the 2023 industry-wide move off LIBOR, plus a spread on top. The spread is where lenders actually compete, and it typically narrows as the size of the line grows, so a $150,000 line and a $5 million line at the same firm can carry meaningfully different all-in rates.
This page deliberately does not quote a specific current rate. SOFR moves, and lender spreads get revised, often without much notice. A number printed here would be wrong within weeks. If you want a current, sourced comparison across lenders, use this site's Spread and Tier Comparison tool once published, which pulls directly from lenders' own published rate schedules rather than repeating a number that was accurate on the day this page was written.
What actually breaks this: the margin call
Borrowing against a portfolio works cleanly as long as the portfolio's value holds up. When it doesn't, the mechanics turn against you fast. If your collateral's value falls enough that your loan-to-value ratio breaches the lender's maintenance threshold, you get a margin call: post more collateral, pay down the loan, or the lender sells your pledged securities, sometimes without further warning, sometimes at the exact moment prices are already down. On a $2 million line against a concentrated stock position, a 30% drawdown in that one name can force a sale far larger, and far worse-timed, than most borrowers expect going in. The margin-call mechanics guide works through that math directly, including how initial and maintenance loan values interact.
What to ask your lender before you sign
Compare published rates across self-directed lenders for your line size with the Spread and Tier Comparison calculator, and run your own liquidity need through the Borrow vs Sell calculator before deciding whether borrowing beats selling for your situation.
- Is this product "purpose credit" or "non-purpose credit" under Regulation U, and does that restrict what I can use the proceeds for?
- What is the advance rate (maximum LTV) for each specific security I plan to pledge, not just the account as a whole, and does that rate change if one position grows to dominate the portfolio?
- What is the maintenance threshold that triggers a call, and how much cushion does my current mix actually give me against a 20%, 30%, and 40% drawdown in my largest single holding?
- Is the interest rate benchmarked to SOFR, and what is my specific spread at my current line size, in writing?
- Does the lender have to notify me before selling pledged collateral to cure a call, or can it sell first and notify after?
- Is this loan issued by the brokerage itself or an affiliated bank, and does that change any of the above?