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Overview
The portfolio line of credit for business lets your business borrow cash using its investments as collateral. This lets you access funds without selling assets, so you can stay invested for long-term growth.
When you open a portfolio line of credit for business, you choose which business investment accounts to use as collateral. The amount you can borrow (your credit limit) is based on the value and risk profile of the assets in those accounts, up to 35% of their eligible value. You can borrow up to your limit at any time and pay interest only on the amount you borrow.
Eligibility
To open a portfolio line of credit for business, the following must be true:
- You have at least one eligible business investment account to use as collateral
- Your corporation meets our financial eligibility criteria, which we check during setup
Open a portfolio line of credit for business
A portfolio line of credit for business is a separate account. You can open it on web or in the Wealthsimple app by following the steps below:
- Log in to the Wealthsimple app
- Tap the add (+) button
- Select Open a new account
- Tap Portfolio line of credit for business
- Tap Open account
- Select your corporation and tap Next
- Review your details and tap Confirm
- Review and sign the required agreements, including the margin lending disclosure and account linking disclosure
- Answer the questions about your corporation's finances so we can confirm eligibility and tap Confirm
- If your corporation is approved, follow the prompts to sign the final agreements, select your collateral accounts, and confirm your details
- Log in to your Wealthsimple profile on a laptop or computer
- Select + Add account from the Home page
- Select Portfolio line of credit for business
- Select Open account
- Select your corporation and select Next
- Review your details and select Confirm
- Review and sign the required agreements, including the margin lending disclosure and account linking disclosure
- Answer the questions about your corporation's finances so we can confirm eligibility and select Confirm
- If your corporation is approved, follow the prompts to sign the final agreements, select your collateral accounts, and confirm your details
Managing a portfolio line of credit for business with multiple directors
When your corporation has more than one director, any authorized director or person on the corporation can view the account, link or unlink collateral, borrow, and repay. This is the same access the primary owner has.
Opening a new portfolio line of credit for business is different: only the primary owner on the corporation can do this. If your corporation already has one, other directors can't open a second one. You can only hold one portfolio line of credit for business per corporation.
Choose your collateral accounts
When you open your account, you choose which corporate investment accounts to use as collateral. You can link up to five business accounts to secure your line of credit. They can be trading or managed business accounts.
Restrictions:
- We don't support Business chequing accounts, corporate margin accounts, or private equity or private credit corporate accounts.
- You can't use personal investment accounts as collateral for a business portfolio line of credit.
- You can't link an account that's already linked to a margin account.
- Your collateral accounts must belong to the same corporation as this portfolio line of credit.
- For example, if Corporation A opens a portfolio line of credit for business, the accounts linked as collateral must also belong to Corporation A. You can't link accounts that belong to Corporation B, even if you own both corporations.
Collateral minimum
In order to be eligible to be used as collateral, the account must provide a minimum credit limit of $1,000 CAD. The credit limit provided by an account is calculated by several factors based on the value of your assets in the account.
Add or change your collateral accounts
You can change which accounts to use as collateral at any time on web or in the Wealthsimple app:
- Log in to the Wealthsimple app
- Tap your Portfolio line of credit for business account
- Tap Settings, then navigate to Collateral
- Select the accounts you want to use as collateral
- Review the Account linking disclosure if prompted and tap Confirm
- Your changes are saved automatically
- Log in to your Wealthsimple profile on a laptop or computer
- Select Portfolio line of credit for business account
- Select Settings, then navigate to Collateral
- Select the accounts you want to use as collateral
- Review the Account linking disclosure if prompted and select Confirm
- Your changes are saved automatically
How to increase your credit limit
You can increase your credit limit in the following ways:
- Sell investments in your collateral accounts
- Transfer eligible holdings or cash into a collateral account
- Add another account as collateral to your portfolio line of credit
Borrow cash
Once your account is set up, you can borrow cash up to your credit limit. The cash that you borrow is transferred to another account that you choose. You only pay interest on the amount that you borrow.
Follow these steps to borrow cash on web or in the Wealthsimple app:
- Log in to the Wealthsimple app
- Tap your Portfolio line of credit for business account
- Tap Borrow
- Enter the amount you wish to borrow
- Select the account you want to transfer the funds to (for example, your business chequing account)
- Follow the prompts to complete the transfer
- Log in to your Wealthsimple profile on a laptop or computer
- Select your Portfolio line of credit for business account
- Select Borrow
- Enter the amount you wish to borrow
- Select the account you want to transfer the funds to (for example, your business chequing account)
- Follow the prompts to complete the transfer
Repay your loan
You can pay back your loan balance at any time, and there's no minimum payment required. Interest is calculated daily and added to your loan balance each month until you pay it off.
Follow these steps to repay your loan on web or in the Wealthsimple app:
- Log in to the Wealthsimple app
- Tap your Portfolio line of credit for business account
- Tap Repay
- Select the account you want to pay from
- Enter the amount you wish to repay
- Follow the prompts to confirm the payment
- Log in to your Wealthsimple profile on a laptop or computer
- Select your Portfolio line of credit for business account
- Select Repay
- Select the account you want to pay from
- Enter the amount you wish to repay
- Follow the prompts to confirm the payment
View accrued interest
You can view the amount of interest that has been accrued each month by tapping into your portfolio line of credit account. Interest is added to your loan balance on the 1st of each month and will be displayed on your account activities.
Interest rate
The interest rate for the portfolio line of credit is based on your client status:
| Status | Rate |
| Core | Prime + 0.5% |
| Premium | Prime + 0% |
| Generation | Prime - 0.5% |
Frequently asked questions
Do I have to complete a credit check to open a portfolio line of credit?
No, we don't run a credit check when you open a personal or business portfolio line of credit.
What's the difference between a portfolio line of credit and a personal line of credit?
A portfolio line of credit uses your investments as collateral, allowing you to borrow without selling assets, while a personal line of credit is unsecured and based solely on your creditworthiness.
Note: Wealthsimple doesn't currently offer a personal line of credit.
How is this different than borrowing from my margin account?
Your portfolio line of credit is a margin loan, but it's less risky. Here's why:
- Your credit limit is more conservative, so there's a bigger buffer to protect you if your investment collateral loses value.
- People typically use their portfolio line of credit to withdraw cash for everyday needs, not to buy more investments. This means losses aren't as magnified.
Learn more about borrowing from your margin account.
Can I claim interest as a tax deduction?
If you borrow money to invest, the interest is generally tax-deductible. However, if you borrow for personal use, you generally cannot claim that as a deduction. We recommend checking with a qualified tax expert for your specific situation.
How does borrowing affect my client status?
Borrowing cash from your portfolio line of credit and withdrawing it from Wealthsimple effectively reduces your assets under management. This can reduce your client status (for example, moving from Premium to Core).
Can I have both a business and a personal portfolio line of credit?
Yes. The business and personal portfolio lines of credit are separate products. You can hold both at the same time, as long as each one uses different eligible collateral accounts.
Can my corporation hold a portfolio line of credit and a margin account at the same time?
Yes. However, a collateral account can only be linked to one product at a time. An account linked to your margin account can't also be used as portfolio line of credit collateral, and the other way around.
Can I use personal investment accounts as collateral for a business portfolio line of credit, or the other way around?
No. At launch, only corporate investment accounts can be used as collateral for a business portfolio line of credit. Using personal and corporate accounts as collateral for each other isn't supported.
Can I use an investment account from a different corporation I own as collateral for this portfolio line of credit?
No. A portfolio line of credit can only use collateral accounts that belong to the same corporation. For example, a portfolio line of credit opened by Corporation A can only use Corporation A's investment accounts as collateral, not Corporation B's, even if you own both corporations.
If I own multiple corporations, can I open a separate portfolio line of credit for each one?
Not yet. You can only have one portfolio line of credit for business at a time, even if you own multiple corporations.
Does the corporate PLOC support accounts with multiple authorized signatories or directors?
Yes. Any authorized director or person on your corporation's account can view, borrow from, repay, and manage collateral on an existing portfolio line of credit for business. Only the primary owner on the corporation can open a new one, and the one-per-corporation rule still applies even with multiple directors.
Will other directors be notified if a portfolio line of credit for business is opened on our corporation?
No. Only the primary owner who opens the account receives the account-opening notification. Other directors on the corporation aren't notified automatically.
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