How to Borrow from Your Investment Portfolio: Smart Lending & Debt Management Through Charles Schwab

How Atlantic Edge aligns borrowing with your plan

• We help clients and business owners access liquidity through Charles Schwab without derailing long-term investing.

• Core tools: Schwab Pledged Asset Line (portfolio-backed, non-purpose), home lending with potential asset-based pricing, and margin lending when appropriate.

• We model costs, taxes, and risk, then right-size the structure to your cash flow and exit plan.

Who this helps

• Business owners managing seasonality, capital calls, or tax payments

• Families bridging a home purchase or renovation

• Executives and professionals with concentrated equity or irregular bonuses

• Investors seeking liquidity without selling appreciated positions

Lending options we coordinate through Schwab

1) Portfolio-backed liquidity: Schwab Pledged Asset Line (PAL)

• What it is: A non-purpose, demand line of credit secured by eligible, non-retirement assets in a Schwab brokerage account.

• Typical uses: Bridge financing for a home, business cash flow, tax payments, tuition, and renovations.

• Restrictions: Proceeds cannot be used to buy securities, repay margin, or be deposited into a brokerage account.

• Risk controls: Borrowing capacity moves with markets, and collateral calls can occur. We set conservative loan-to-value targets and define tripwires.

2) Home lending with potential rate discounts

• What it is: Access to home loans where rate discounts may be available based on qualifying Schwab assets through Schwab’s home-loan provider.

• Use cases: Purchases and refinances where fixed-term debt is more efficient than a revolving line.

• How we evaluate: We compare true all-in cost, discount tiers, and lock terms against a PAL draw and your cash-flow plan.

• What it is: Investment-purpose borrowing secured by your portfolio for trading and investment liquidity only.

• How we use it: Case-by-case, with strict limits and clear repayment plans. Margin is different from PAL and carries distinct risks.

Choosing the right tool

Scenario	Best-fit option	Why it fits	What we watch
Bridge to a home closing or large purchase	PAL, then refinance into a mortgage	Fast access without selling investments; move to term debt once timing is certain	Market volatility on collateral, exit timing, rate sensitivity
Business owner tax or working-capital gap	PAL	Matches draws to receivables and reduces unnecessary interest carry	LTV headroom, triggers, repayment from cash flow
Long-term home financing	Mortgage with asset-based pricing	Term certainty and potential lower total cost vs. revolving line	True APR vs. PAL, prepayment options, lock terms
Short, defined investment liquidity	Margin (case-by-case)	Investment-only, tightly controlled	Maintenance margin, drawdowns, rapid payback plan

How we personalize the structure

1. Discovery

   Map monthly inflows/outflows.

   Define maximum debt service, minimum portfolio liquidity, and exit plan.

   
   

2. Instrument selection

   PAL for flexible, non-purpose liquidity without selling core holdings.

   Mortgage when a fixed term and rate are more efficient than a line.

   Margin only when investment-purpose borrowing is warranted.

   
   

3. Modeling and stress tests

   Rate scenarios vs. cash flow.

   Portfolio drawdown impact on PAL capacity.

   Tax awareness if selling assets is the alternative.

   
   

4. Implementation

   Coordinate application, documentation, and funding with Schwab.

   Stage draws to minimize interest and maintain conservative LTV.

   
   

5. Ongoing monitoring

   Collateral levels, rates, and covenant headroom.

   Tripwires to scale back, refinance, or repay.

Important considerations

• PAL is non-purpose. Funds cannot be used to purchase securities, repay margin debt, or be deposited into a brokerage account.

• Collateral risk exists. Market declines can trigger maintenance calls or forced paydowns. We manage headroom proactively.

• Program terms can change. Home-loan discounts, eligibility, rates, and providers may change. We verify specifics at the application.

FAQs

Can I borrow against my investment account instead of selling?

Yes. A Schwab Pledged Asset Line allows non-purpose borrowing secured by eligible, non-retirement assets. We size it conservatively to reduce collateral-call risk.

When is a mortgage better than a PAL?

If you need multi-year financing with predictable payments, a mortgage with potential asset-based pricing can be more cost-effective than a revolving line.

Is margin the same as PAL?

No. Margin is investment-purpose borrowing with different rules and risks. PAL is non-purpose and typically funds liquidity needs unrelated to buying securities.

Will this affect my investment strategy?

We take a plan-first approach. We protect your long-term allocation by borrowing prudently, keeping liquidity buffers, and defining an exit plan up front.

How Atlantic Edge helps business owners in Jacksonville

• Local planning expertise in Jacksonville, Ponte Vedra, and the Beaches

• Integrated advice across borrowing, taxes, and investment policy

• Hands-on coordination with Schwab so you can focus on running the business

Next step

Considering a purchase, renovation, tax payment, or working-capital need? We will compare PAL vs. mortgage vs. margin for your situation and show total cost, risks, and fit with your plan. Contact Atlantic Edge to schedule a planning call.

Disclosures

• Lending is subject to credit and collateral approval. Terms, conditions, and eligibility requirements are set by the provider and may change.

• Pledged Asset Lines are non-purpose and may not be used to purchase or carry securities or to repay margin.

• Borrowing against investments involves risk, including collateral shortfalls in declining markets that may require additional deposits or liquidation of assets.

• This material is for informational purposes only, not individualized advice or a solicitation to borrow or lend. Consult your tax and legal advisors regarding your specific situation.