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Accessing new avenues to leverage existing wealth
Through strategic alliances with nonbank wealth management platforms, we enable independent and registered financial professionals to expand their service offering to better compete with larger and more fully-resourced institutions.
A one-of-a-kind offering to serve you better
The Bancorp Commercial Lending business offers a distinctive set of services which reflect our commitment to meeting your evolving business needs.
Whether you need a small business loan or leasing services for a fleet of vehicles, we can provide you the expertise and financial traction to keep you on the road to success.
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As a direct lender, we provide a streamlined, single source of origination, funding, and asset management for loan brokers and their clients seeking to purchase and reposition multifamily and other commercial real estate properties.
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We’re not a startup, but we think that way. The Bancorp approaches each client’s needs as an opportunity to develop the next generation of banking products and services.
STRENGTHENING OUR VISIONARY FOUNDATION
THE BANCORP LEADERSHIP FOSTERS AN INVENTIVE APPROACH TOWARD BANKING.
The Bancorp Leadership Team sets the compass for exploring new perspectives that drive continuous organizational growth.
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Tackle Tax Payments With an Insurance or Securities-Backed Line of Credit
Gregory Fat, VP Business Development Officer, Institutional Banking
A large tax bill can catch anyone off guard, and the best way to handle this unpredictable situation is to start conversations early on. As financial professionals meet with clients to proactively plan for the 2023 tax season, one of the first items to cover should be how to strategically pay their 2022 tax bill by utilizing assets, preserving wealth, and keeping portfolio investments in place.
One tactic that can help achieve these goals is accessing liquidity through the cash value of an eligible whole life insurance policy with an Insurance-Backed Line of Credit (IBLOC)1,2 or from non-retirement investments through a Securities-Backed Line of Credit (SBLOC).3 Both options can provide financial professionals and their clients the flexibility to pay taxes and meet other cash needs throughout the year without disrupting long-term financial goals.4
For the 2022 tax year, here are federal income brackets and rates to be mindful of:5
Tax Rate
Single Individual
Married Joint Return
Married Separate Return
Head of Household
10%
$10,275 or less
$20,550 or less
$10,275 or less
$14,650 or less
12%
$10,276 to $41,775
$20,551 to $83,550
$10,276 to $41,775
$14,651 to $55,900
22%
$41,776 to $89,075
$83,551 to $178,150
$41,776 to $89,075
$55,901 to $89,050
24%
$89,076 to $170,050
$178,151 to $340,100
$89,076 to $170,050
$89,051 to $170,050
32%
$170,051 to $215,950
$340,101 to $431,900
$170,051 to $215,950
$170,501 to $215,950
35%
$215,951 to $539,900
$431,901 to $647,850
$215,951 to $323,925
$215,951 to $539,900
37%
$539,901 or more
$647,851 or more
$323,926 or more
$539,901 or more
Capital Gains Tax Rates6
Tax Rate
Single Individual
Married Joint Return
Married Separate Return
Head of Household
0%
$44,625 or less
$89,250 or less
$44,625 or less
$59,750 or less
15%
$44,626 to $492,300
$89,251 to $553,850
$44,626 to $276,900
$59,751 to $523,050
20%
$492,301 or more
$553,851 or more
$276,901 or more
$523,051 or more
Why pay taxes with a line of credit?
Other financial goals and obligations can take priority throughout the rest of the year, and a large tax payment can easily be overlooked. To maintain progress toward financial goals, it’s beneficial to have a plan in place to pay unavoidable tax bills.
Through the use of a line of credit, clients can access the money necessary to get this expense paid on time and avoid unnecessary penalties. By accessing credit through an IBLOC or SBLOC, clients can access liquidity from assets already available and avoid high-interest payments from other lines of credit. The Bancorp’s Institutional Banking team offers flexible payment terms with 36-month fixed rates for both an IBLOC and SBLOC. With this option, clients can choose to use funds to pay the entirety of their tax bill and use the extra cash to continue to fulfill other financial goals.
The IBLOC and SBLOC can offer competitive interest rates and cost-efficiencies compared to other conventional loans, including no application fees, underwriting fees, appraisal fees, or penalty fees for early payoff.7 When determining if an IBLOC or SBLOC is right for you, there are a few differentiators to keep in mind:
IBLOC
SBLOC
Interest-only revolving credit line that lets borrower access up to 95% of the cash value of an eligible whole life insurance policy1
Interest-only revolving line of credit based on nonqualified assets in an investment account
Minimum Credit Line: $75,0008
Minimum Credit Line: $100,0009
Available to individuals and trusts
Available to individuals, trusts, and entities
No closing costs
No annual or monthly fees
No charge for the portion of line not in use
How to get started?
Our Institutional Banking team is backed by more than 20 years of experience providing banking solutions for financial professionals and non-bank institutions. Our team partners directly with financial professionals to understand the wealth management strategy of their clients and provide a high level of support without fear of competition that can often come from other banks. Whether an IBLOC or SBLOC is the right fit for your client, the process is simplified with the help of TALEA®, our proprietary loan origination platform that enables speed and simplicity.10
When developing a strategy to pay 2022 taxes, an IBLOC or SBLOC could provide financial professionals and their clients with a strategic method to pay their tax bill and other living expenses without disrupting portfolio assets or assets under management.
Opinions, findings, or perspectives contained in this blog are those of the authors.
1. Line of credit is contingent on life insurance policy remaining in good standing. The insurance policy owner must be the borrower and borrower must maintain a primary residential address in the U.S. Insurance policy must be issued by one of the following approved insurance providers to be eligible as IBLOC collateral: Guardian, MassMutual, Northwestern Mutual, NY Life, John Hancock, Penn Mutual, and Ameritas Life Insurance Corp. Other terms apply, See application for details.
2. Subject to credit approval and underwriting.
3. Securities-based lending has special risks and may not be suitable for everyone. If the market value of the pledged collateral declines below required level, the client may be required to pay down the loan or line of credit or pledge additional eligible collateral in order to maintain it, or the Bank may require the sale of some or all of the client's pledged collateral. The sale of the client's pledged collateral may cause adverse tax consequences.
4. An IBLOC or SBLOC offered through The Bancorp Bank, N.A. (“Bank”) cannot be used for the purchase of securities or to pay off a margin loan that was used to purchase securities.
7. The Bank does not charge an application fee. State, local, and/or third-party fees may apply in some states.
8. Minimum requested amount must be $75,000.00 or such greater amount as may be prescribed from time to time pursuant to 12 C.F.R. Section 1026.3(b) of Regulation Z issued by the Consumer Financial Protection Bureau as the minimum threshold necessary to qualify the Line of Credit as an exempt consumer credit transaction thereunder.
9. Minimum requested amount must be $100,000.00 or such greater amount as may be prescribed from time to time pursuant to 12 C.F.R. Section 1026.3(b) of Regulation Z issued by the Consumer Financial Protection Bureau as the minimum threshold necessary to qualify the Line of Credit as an exempt consumer credit transaction thereunder.
10. The Bank does not offer tax, legal, or investment advice. Clients should consult a tax advisor, lawyer, or financial professional, as necessary.
IBLOC
Insurance-Based Loans
Insurance-Backed Line of Credit
SBLOC
Securities-Based Loans
Securities-Backed Line of Credit
Capital Gains
Taxes
Tax Payments
Liquidity
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