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Lines of Credit

Loan Management Account® (LMA® account), a secured line of credit

Are you looking for a flexible, convenient way to manage cash flow?

The Loan Management Account® (LMA® account) offered through Bank of America is a flexible line of credit that can be used for almost any purpose. Whether you're looking to help a family member, remodel your kitchen, pay taxes or cover education costs, an LMA account can help. With an LMA account, you can generate cash, consolidate any other outstanding loans if desired and gain a clearer picture of your balance sheet.

 

How to use an LMA account

You can use the LMA account as a convenient way to pursue a variety of personal and business financing needs, including:

 

  • Personal and investment real estate purchases
  • Luxury purchases
  • Tax payments
  • Education costs
  • Medical expenses
  • Weddings
  • Debt consolidation
  • Business startup or expansion or acquisitions
  • Diversification for concentrated securities positions
  • Emergency expenses

A borrowing strategy

An LMA account is a secured line of credit that uses your eligible securities, such as stocks and bonds, as collateral. There are no fees to establish, no minimum balance nor annual fee, so you can access funds as you need to. You can access funds, generally within one day of approval. You can access your credit in the form of both fixed rate and variable rate loans. Your financial advisor can help you choose the loan terms that work best for your individual situation.

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Talk to your Merrill financial advisor about whether an LMA account might be appropriate for you.

 

Risks of LMA borrowing

Securities-based financing involves special risks. You should review the LMA Loan Agreement and related documents and disclosures carefully and consult with your own independent tax and legal advisors.

 

  • A decline in the value of your collateral assets may require you to provide additional funds or securities to avoid a collateral maintenance call. You can lose more funds than are held in the collateral account. The LMA account is a full-recourse loan and you will be liable for any deficiency.
  • Bank of America, N.A. ("the Bank") can force the sale or other liquidation of any securities or other investment property in the collateral account and, unless otherwise required by law, can do so without first contacting you.
  • You are not entitled to choose which securities in the collateral account are liquidated or sold.
  • The Bank can change its collateral maintenance requirement at any time without notice to you.
  • You are not entitled to an extension of time to satisfy the Bank’s collateral maintenance requirement.
  • There may be adverse tax or other consequences to you if securities are sold or otherwise liquidated by the Bank.
  • The LMA account is an uncommitted facility, although loans to individuals and trusts may be committed in an amount not to exceed $100,000. The Bank may demand full or partial repayment at any time and any commitment may be immediately terminated.
  • For fixed-rate advances and term loans, principal payments made in advance of the end of the applicable fixed-rate period, whether voluntarily or involuntarily, (due to demand or liquidation by the Bank,) may be subject to a substantial breakage fee as determined by the Bank.
  • Some restrictions on the use of LMA account proceeds may apply under the terms of the loan documents and applicable laws and regulations.

 

Things to consider:

  • Are you planning to make a large purchase?
  • How do you plan to keep your investment approach intact if an unexpected need arises?
  • How do you plan to pay for tuition?

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The Loan Management Account (LMA account) is a demand line of credit provided by Bank of America, N.A., Member FDIC. Equal Opportunity Lender. The LMA account requires a brokerage account at Merrill Lynch, Pierce, Fenner & Smith Incorporated and sufficient eligible collateral to support a minimum credit facility size of $100,000. All securities are subject to credit approval and Bank of America, N.A. may change its collateral maintenance requirements at any time. Securities-based financing involves special risks and is not for everyone. When considering a securities-based loan, consideration should be given to individual requirements, portfolio composition and risk tolerance, as well as capital gains, portfolio performance expectations and investment time horizon. The securities or other assets in any collateral account may be sold to meet a collateral call without notice to the client, the client is not entitled to an extension of time on the collateral call and the client is not entitled to choose which securities or other assets will be sold. The client can lose more funds than deposited in such collateral account. The LMA account is uncommitted and Bank of America, N.A. may demand full repayment at any time. A complete description of the loan terms can be found within the LMA account agreement. Clients should consult their own independent tax and legal advisors. Some restrictions may apply to purpose loans and not all managed accounts are eligible as collateral. All applications for LMA accounts are subject to approval by Bank of America, N.A.

 

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