A new Lending facility for our clients

P&A clients who meet certain criteria now have another way to borrow money against their Schwab after-tax investment (i.e. non-retirement) account.  Goldman Sachs Private Bank Select offers a flexible line of credit that is secured by a pledge of your Schwab brokerage investment assets.   In plain English, Goldman Sachs (GS) is willing to loan you money because you have enough investment assets to repay the loan and because you’ve agreed to pledge these assets as collateral.

Key features and details:

  • Loans are offered from $75,000 up to $25 million, with minimum draws of $2,500.
  • This is a revolving line, meaning you can borrow, repay, and borrow again.
  • Variable interest rate tied to the 1-month term Secured Overnight Financing Rate (SOFR).
    • Rates depend on the amount borrowed.
    • Ask your Lead Advisor at P&A for current rates and to review any other options.
  • This is an interest only loan with no stated maturity date.
    • Unlike a traditional loan, there are no principal payments or a loan term, although Goldman retains the right to demand repayment at any time.
  • No fees beyond the interest charge.
  • No personal financial statements, tax returns, other documents, or applications are needed.
  • Cannot be used to buy stocks, bonds, mutual funds or other securities, i.e. can’t be used to margin your account.
  • Eligible account types include individual, joint, trust, LLCs, and partnerships, however, joint trust accounts do not qualify.
  • We have a dedicated contact at Goldman to facilitate and answer any questions. 

How it works:

  • After loan closing documents are signed, you will receive an email with a registration link to the GS Select Portal.
  • Link an external bank account. Note that loan proceeds cannot be sent to a brokerage account due to federal regulations.
  • Borrow or make payments in three simple steps.
  • Interest payments are paid out of your linked bank account.

When this line of credit works best:

  • Weddings
  • Educational expenses
  • Luxury purchases
  • Personal and investment real estate purchases
  • Home improvements
  • Tax payments
  • Liquidity and working capital for your business

Important to note:

  • Risks include a market downturn, tax implications if pledged securities are liquidated, and a potential increase in interest rates.
  • Consult with your P&A advisor to determine if a securities-based loan is suitable for the intended use of these monies.

 

Clicking on the links above may result in you leaving the Pittenger & Anderson, Inc. website. The opinions and ideas expressed on these external websites are those of third-party vendors and Pittenger & Anderson, Inc. has not approved or endorsed any of this third-party content. For the full Terms & Conditions of using the Pittenger & Anderson, Inc. website, click on this link.

Pittenger & Anderson, Inc. does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.  Additionally, the information presented here is not intended to be a recommendation to buy or sell any specific security.  To learn more about our firm and investment approach, check out our Form ADV.

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Since 1995, Pittenger & Anderson has guided individuals and families going through money-in-motion events. We are a fee-only Registered Investment Advisor and a full-time fiduciary providing investment management, financial planning, and complimentary services to 700+ clients in over 30 U.S. states.

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