What is Nationwide Smart Credit^SM

Did you know that liquidity is an important factor in your financial portfolio?

Having liquid assets can help you pay off your short-term liabilities and debts and help you meet your financial obligations as they come due. While many people know about liquidity when it comes to paying for tax obligations, there are some non-tax situations in which having access to liquid assets can be important.

Meet Elaine and Mark

Elaine and Mark have been dreaming about renovating their home for years, and they feel like the time is right to start. They’ve set a budget of $200,000, but when it comes to funding the project they keep running into issues. They had planned to use a home equity line of credit (HELOC) to pay for the renovation, but they realized that HELOCs and personal loans have drawbacks — higher interest rates, lending limitations, added fees — not to mention the time it takes to secure the loan. They’re afraid that they may have to push their dream of a home renovation to the side.

They decide to talk with their financial professional about the possibility of liquidating some of the assets from their non-retirement brokerage account. The financial professional reminds them of potential tax obligations and capital gains taxes they could be facing by making that decision. He then suggests another option.

Nationwide offers a solution that may help meet your liquidity needs

Nationwide Smart Credit^SM is a securities-backed line of credit (SBLOC) that works as an alternative to liquidating assets when you need cash. It is a revolving line of credit secured by your non-retirement investment assets. It lets you borrow against the value of your portfolio without disrupting the investment strategy that you and your financial professional have carefully developed.

Why should you choose Smart Credit?

• Smart Credit is not taxable when opened or used
• There are no account opening fees, annual fees or prepayment fees
• The term is indefinite, so it can be paid back whenever it is most convenient

Potential risks of an SBLOC

Nationwide Smart Credit still contains risk you should know about. If the value of your portfolio falls below a certain level, you may be required to provide additional securities as collateral or cash to immediately pay down part of the line. If that’s not possible, some investments may be liquidated, resulting in potential tax consequences.

Talk with your financial professional about Nationwide Smart Credit and how it may help your financial portfolio.