• You can access cash without selling investments by using strategies like a securities-backed line of credit, which lets you borrow against eligible assets in a taxable investment account.
• This approach can help you avoid triggering capital gains, selling at the wrong time, or disrupting a portfolio you still want to hold.
• Borrowing against investments can be useful for short-term cash needs, but it should have a clear purpose, repayment plan, and understanding of the risks.

When You Need Cash but Don’t Want to Sell

Sometimes you need cash, but selling investments doesn’t feel like the right move.

Maybe you are buying a car, starting a home project, covering a tax bill, or bridging a temporary cash-flow gap. You have money invested, but you don’t necessarily want to sell those investments just because you need access to cash right now.

Selling investments can create taxes. It can disrupt a portfolio. It can also force you to sell something you still want to own, possibly at a time when you would rather leave it alone.

That’s why many people want to know if there’s another way to access cash without disrupting the rest of the plan. One option is a securities-backed line of credit, often called an SBLOC.

What Is a Securities-Backed Line of Credit

A securities-backed line of credit is a line of credit secured by assets in a non-retirement investment account. FINRA describes it as a revolving line of credit that lets you borrow money using securities in your investment account as collateral.

Think of it a little like a home equity line of credit, or HELOC. With a HELOC, you are borrowing against the equity in your house. With an SBLOC, you are borrowing against eligible securities in an investment account.

You are not selling the investments. You are borrowing against them.

The amount you can borrow is based on the value of the account and the type of investments inside it. A portfolio with more conservative holdings may support a different borrowing amount than one with more volatile or concentrated positions. The interest rate and terms can also vary depending on the institution, the size of the line, and the amount borrowed.

These lines are generally tied to taxable brokerage accounts, not retirement accounts. That distinction matters because retirement accounts have their own rules and limitations.

Why Someone Might Use an SBLOC Instead of Selling Investments

The biggest reason people consider an SBLOC is because they need cash, but they don’t want to sell.

Let’s say you need $50,000 to buy a car. You could sell investments to raise the cash. But maybe those investments have appreciated, and selling them would trigger capital gains. Maybe you own a stock you still believe in. Maybe the market is down, and selling right now feels poorly timed.

I can already hear the Apple and Nvidia people saying, “Sell my stock to buy a car? Absolutely not.”

That’s where an SBLOC can be useful. It may allow you to borrow against the value of the account, use the cash for the expense, and keep the investments in place.

This can be especially helpful when the need is temporary. Maybe you are waiting for a bonus, selling another asset, receiving income later in the year, or trying to manage cash flow without creating a tax event.

In the right situation, an SBLOC can act almost like a backup reserve. However, it’s not your emergency fund, and it shouldn’t replace thoughtful cash planning. But it can be another source of liquidity if you need access to money quickly and do not want to sell investments immediately.

When an SBLOC Can Make Sense

An SBLOC is usually best as a short-term or strategic cash-flow tool.

It may make sense for things like:

• Buying a car
• Covering a temporary tax bill
• Funding part of a home improvement project
• Bridging cash flow before a bonus or liquidity event
• Avoiding a poorly timed investment sale
• Managing expenses during a transition

The key word here is temporary.

I don’t like the idea of using an SBLOC to support ongoing lifestyle spending with no repayment plan. That’s where this can move from strategic to sloppy very quickly.

Debt is not automatically bad. A lot of financial planning is debt management. It’s not only investment management and tax planning. It’s also deciding when borrowing helps your overall financial life and when it adds pressure you don’t need.

An SBLOC can be a very helpful tool when it solves a specific problem and there is a clear plan for paying it down.

The Risks of Borrowing Against Your Investments

This is the part you need to understand before using one.

An SBLOC is convenient, but it’s still debt. The fact that it is tied to your investment account doesn’t make it free money.

The biggest risk is that the value of your investments can fall. If the account drops too much, the lender may require you to add collateral, repay part of the loan, or sell securities to reduce the balance. This can affect your long-term investment goals.

That’s why you generally don’t want to borrow the maximum amount available. Just because the institution will lend you a certain amount doesn’t mean that is the right amount to use.

There is also the issue of interest. Some lines may allow interest to accrue or require interest-only payments. That can feel easy in the short term, but if you are not paying the balance down, the loan can grow over time.

Interest rates may also change. Many lines of credit use variable rates, which means the cost of borrowing can rise.

SBLOC vs. HELOC vs. Selling Investments

An SBLOC is not the only way to access cash. It is one tool among several, and the right choice depends on why you need the money, how long you need it, and what kind of risk you are comfortable taking.

When You Should Probably Not Use an SBLOC

There are times when I would be very careful with this strategy.

I would be cautious if you don’t have a clear repayment plan. I would also be cautious if the borrowing is really covering an ongoing spending problem, not a temporary need.

It may not be a good fit if your portfolio is highly concentrated, very volatile, or already taking more risk than you are comfortable with. If a market drop would force you into a decision you don’t want to make, that matters.

I would also pause if the expense itself is not aligned with your broader plan. Borrowing against investments to buy flexibility or solve a short-term cash-flow issue can be very different from borrowing because you don’t want to make a harder spending decision.

Sometimes selling investments is the better answer. Other times using cash is better. And sometimes borrowing is appropriate. The point is to choose intentionally.

Questions to Ask Before Opening or Using an SBLOC

Before you use a securities-backed line of credit, ask yourself:

• What is the cash for?
• Is this a short-term need or an ongoing expense?
• How much can I borrow without pushing the line too hard?
• What is the interest rate, and can it change?
• What happens if the market drops?
• What is my repayment plan?
• Would selling some investments actually be simpler?
• How does this affect my taxes, debt, and long-term plan?

How a Financial Planner Helps You Decide

This is where planning becomes important. The decision is not just whether an SBLOC is available, but whether using one improves your financial life.

A planner can help you compare selling versus borrowing, look at the potential tax impact, evaluate concentration risk, think through repayment, and decide how much liquidity you really need. A planner can also help you see whether this is a short-term cash-flow tool or a sign that something else in the plan needs attention.

That’s the bigger conversation.

You are not just trying to get cash. You are trying to manage your money in a way that supports your life now and protects your options later.

Liquidity Is Helpful When It Has a Plan

A securities-backed line of credit can be a useful tool. It can help you access cash without selling investments, avoid a poorly timed sale, and manage short-term cash-flow needs more strategically. But it needs guardrails.

It should have a clear purpose and a repayment plan. It should also fit into the rest of your financial picture, including your taxes, investments, debt, and long-term goals.

Use it thoughtfully, and an SBLOC can give you more flexibility. Otherwise, it can create risk you didn’t intend to take.

If you are trying to decide whether to sell investments, borrow against them, or create a better liquidity strategy, I invite you to start with my short questionnaire. It is a simple way to share what you are thinking through and see whether working together could help you move forward with more clarity and confidence.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.