Reserve Line of Credit

While there are many potential uses for the Reserve Line of Credit, it’s important to understand when it makes the most sense to use it versus other sources of borrowing. We generally believe it's more appropriate when bridge financing is needed (generally less than 12 months).

Examples of bridge financing include:

• Working capital for business owners
• Education financing until student loan proceeds or other expected cash flow comes in
• Assistance for family members until they can pay you back
• Home renovations/repairs until home equity loan proceeds or other expected cash flow comes in
• Tax payment, if you're expecting a cash inflow that would cover the amount owed soon

How it works

Instead of borrowing from a bank, you borrow from an affiliated non-bank lender, Edward Jones, SBL, LLC using securities within your eligible Edward Jones accounts as collateral. You can borrow against your Edward Jones Advisory Solutions Fund®, Advisory Solutions UMA® and Guided Solutions Fund® accounts.

The securities within your accounts serve as a source of collateral for the loan. You can anticipate borrowing rates of up to 65-75% of the value of your eligible, non-retirement assets. You may select one or more eligible accounts to pledge as collateral. (You are still able to trade securities and access cash within pledged accounts, so long as minimum maintenance requirements are met.)

Eligibility

You may apply for a Reserve Line of Credit in the minimum amount of $51,000, which will generally require a minimum pledged collateral value of $73,000, actual value will vary depending on underlying collateral.

The Reserve Line of Credit is offered by Edward Jones, SBL, LLC, a non-bank lender. The availability of the Reserve Line is dependent on whether the lender is authorized to extend credit in the state where you reside, the value of the assets, including securities held in the pledged accounts and the eligibility guidelines set forth in the Reserve Line of Credit Agreement.

Why you might use it

A Reserve Line of Credit could help keep your long-term investment strategy intact. It allows you to retain ownership of your investments and potentially avoid tax consequences of selling investments.

This may not be the solution for everyone. As with any loan, there are risks involved. Ask your financial advisor if this might be the right strategy for you.

Risks

The Reserve Line of Credit offered by Edward Jones SBL, LLC is an uncommitted demand line of credit secured by eligible securities in select investment account(s). Borrowing against securities has its risks and is not appropriate for everyone. You can lose more funds than you deposit in your account. If the value of your collateral declines, you may be required by Edward Jones SBL, LLC to deposit cash or additional securities, or the securities in your account may be sold to meet the maintenance call without notice to you. You may not be entitled to choose which securities or other assets in your accounts are liquidated or sold to meet a maintenance call. Edward Jones SBL, LLC can increase its maintenance requirements at any time and/or not grant an extension of time. Interest will begin to accrue from the date of the first advance and be charged to your account. Available only on certain types of accounts.

How to apply

The process to apply for a Reserve Line of Credit starts with a conversation between you and your financial advisor to determine if a Reserve Line of Credit is an appropriate solution. If so, you will complete a loan application that will be submitted for underwriting review. Approved clients will have access to their loan within 1 to 3 business days.

Our current rates

Reserve Lines of Credit (securities-based loans) share the same pricing tiers and rates as Personal Line of Credit (margin loans). The interest rate is a variable rate that fluctuates with the base rate. Edward Jones SBL, LLC uses a base rate of 4.00% or the current prime rate, whichever is higher. The prime rate used by Edward Jones to determine the interest rate charged is the prime rate as published in the Wall Street Journal and the amount by which the interest rate charged on each loan account exceeds the prime rate varies according to the size of the client's total assets under care. Visit for current Reserve Line of Credit rates.