{"id":81967,"title":"🔷 SyntheticFi: Cheapest way to get liquidity from your stock investments","tagline":"Cheapest securities-backed line of credit (SBLOC), right on your existing brokerage platform.","body":"# TLDR\n\nSyntheticFi helps you borrow at 5.83% APR using your investments as collateral without switching to another brokerage. You can save $30K+ per year borrowing $500K on Charles Schwab while staying with Schwab.\n\n🌟[Start here](https://app.syntheticfi.com/) or [talk to us](https://calendly.com/tonyyanga/meet-with-tony-syntheticfi) to start saving money. No credit checks involved. 🌟\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/500c3c23-5b0f-408a-976c-baa5a18e4b42)\n\n# ❓Why Borrow Against Your Investments: Continued Investment Growth + No Capital Gains Tax!\n\nMany use margin loans or a securities-backed line of credit (SBLOC) to **get liquidity** from their investments **without selling and incurring capital gains tax**.\n\nFor example:\n\n* You work at big tech: you have concentration stock positions that appreciated greatly. You can now use SBLOC to fund a downpayment on a house without paying 20% on capital gains tax or impacting DTI\n* You are an angel investor: you can now chase the extra returns from investing in startups and not miss out on the 9% historical returns of the S\u0026P 500.\n\nEven Elon Musk planned to take out a $12.5B loan against his Tesla shares to acquire Twitter/X!\n\nAdditionally, securities-backed loans have **no impact on your credit report.**\n\n* No credit checks; don’t show up on credit reports; no impact on DTI (debt-to-income) calculations\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/03e81b3c-6601-4ca7-86a5-034813087729)\n\n# ❌ Problem: Expensive, and Hard to Switch to Cheaper Providers\n\nGetting a competitive interest rate to borrow against your investments requires upending your financial life. You are forced to choose between two bad options:\n\n* either **overpay thousands** in interest per year;\n* or take on the **hassle of switching** to a cheaper broker.\n\nA real-life example: Tony **🙋‍♂️,** ex-Stripe, has personally tried to borrow against his investments to pay the downpayment on his first house.\n\n* **Tony had to overpay $13K+ a year!** Fidelity’s website quoted Tony 11.83%. He tried to negotiate. It took Fidelity 2 weeks to get back quoting 10%; even the mortgage was only at 7.5% at the time.\n* **Tony also hated switching to a low-cost broker.** When searching for cheaper rates, Tony found Interactive Brokers (IBKR) offer \\~6.3%. However, he would have to:\n  * abandon the trading interface he is used to,\n  * set up an entirely new account and wait for assets to transfer,\n  * manage his retirement account in a separate brokerage,\n  * and receive almost no support from IBKR. He heard they even liquidate assets without notice!\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/2729d18e-1617-4a3d-87b9-1d759021392e)\n\n**How big is this problem?**\n\nIn total, credulous individual investors overpay $32B+ in interest per year to banks and broker-dealers, fueling a $1 trillion+ market with low competition. This market is similar to the size of total outstanding credit card debt, or 2.65x the size of the HELOC market.\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/2f0e0799-acc3-411b-b2e2-7e8b9721a42b)\n\n# 💡Solution: Add SyntheticFi to your current brokerage platform.\n\nRegistered with the SEC, SyntheticFi acts as an **add-on** to your current investment platform. It allows you to borrow at a base rate + 0.5%, currently **5\\.83%,** **without switching** to another brokerage account.\n\nGet liquidity in three easy steps:\n\n* Connect SyntheticFi to your brokerage account via a Plaid-like connection;\n  * We will ask you for certain permissions;\n  * We are required by law to act in your best interest - we are an SEC-registered investment advisor.\n* Tell us the amount you’d like to borrow and when you’d like to repay;\n* Withdraw the cash immediately!\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/ce1f7529-7bf4-4858-b143-3c364df850e8)\n\n**How much does SyntheticFi cost?**\n\n* \\[FREE DEAL\\] [Join our Slack community](https://join.slack.com/t/syntheticficommunity/shared_invite/zt-2mab058vk-GGgIEEMgJ\\~8xwsasPx7FXQ), and get your first loan ON US!\n* 0\\.016% of your loan amount per month, up to $200 per month. This is 1/30 to 1/10 of what traditional brokers currently charge.\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/91a2ea6e-d7e7-4243-9412-eedbbc8819d0)\n\n# 📝 FAQ\n\n**How can you offer the cheapest margin rate on the market?**\n\nWe help you enter into an exchange-traded loan contract. You can think of it as we bring your loan contract to Wall Street, where all traders compete in real time to offer you the cheapest loan.\n\n**What is the loan you trade on exchange here?**\n\nWe trade a basket of options called box spreads. These options are hedged so that they do not move with the underlying. Read more about them [**here**](https://www.syntheticfi.com/how-it-works), and see how [**Reddit traders**](https://www.reddit.com/r/PMTraders/comments/pziqxa/spx_box_spreads_what_they_are_and_how_to_use_them/) are using them.\n\n**What is the tax treatment for the loan interest?**\n\nThe loan interest incurred is always tax deductible as capital losses.\n\n**How can you let me stay with my current brokerage?**\n\nOur loan contract is supported across major brokerages. We integrate with them and trade it in your account, so you don’t need to switch.\n\n**How much can I borrow against my investment?**\n\nMargin requirements from your current broker apply. Most clients should be able to borrow up to 50% of their portfolio value. Exceptions: non-liquid investments, retirement assets, or crypto assets.\n\n**What can I use my borrowed cash for?**\n\nMoney borrowed from our product can be used for any purpose, including buying more stocks.\n\n# 👥 Team\n\n![uploaded image](/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/8dd7d1af-505b-4f77-b967-8f620db3455f)\n\nWe’re Joseph and Tony (left, right), the team behind SyntheticFi. Joseph worked on similar products with financial advisors when he was the first employee who built VRGL, a series-A wealth-tech startup valued at over $100MM. That inspired us to build SyntheticFi and bring cheap securities-backed borrowing rates reserved for the ultra-rich to the average person.\n\n# 📢 Asks\n\n\\[FREE DEAL\\] If you are currently using margins / security-backed loans:\n\n* We’d love to chat and see what you think of our product! Let’s [**find time to meet**](https://calendly.com/tonyyanga/meet-with-tony-syntheticfi). We will waive our fee from your first loan.\n* You can also [sign up](https://app.syntheticfi.com) on our website directly!\n\n\\[Introductions\\] If you know **anyone at financial advisor platforms, independent broker-dealers, or mortgage brokers** who wants to gain revenue while giving their clients better rates:\n\n* We’d love a referral. Our email is [founders@syntheticfi.com](mailto:founders@syntheticfi.com)\n* Or, share our website: [syntheticfi.com](http://syntheticfi.com/).","slug":"LK3-syntheticfi-cheapest-way-to-get-liquidity-from-your-stock-investments","created_at":"2024-07-08T19:18:02.194Z","updated_at":"2026-07-22T11:00:04.026Z","total_vote_count":57,"url":"https://www.ycombinator.com/launches/LK3-syntheticfi-cheapest-way-to-get-liquidity-from-your-stock-investments","share_image_url":"https://www.ycombinator.com/media/?type=post\u0026id=81967\u0026key=user_uploads/1351685/8dd7d1af-505b-4f77-b967-8f620db3455f","company":{"id":29026,"name":"SyntheticFi","slug":"syntheticfi","url":"https://www.syntheticfi.com/","logo":"https://bookface-images.s3.amazonaws.com/small_logos/21cd7289472fa982f68b9ab59329eb2acf583e66.png","batch":"Summer 2023","industry":"Fintech","tags":[],"search_path":"https://bookface.ycombinator.com/company/29026"}}