Lending against portfolio
Discussion
As always, financial firms like scout masters should be checked against the register before doing anything else.
They can't hold client money and some other all of their products are outside the FSCS.
Collateralising is pretty common practice but as mooted by more than one person above, you don't want to opt for any kind of aggressive margin and nor do you want to use all the loan cash as you need a cash reserve for margin calls or margin changes.
Most people fall foul because they collateralise a load of illiquid stuff and fail to understand that a margin call on that stuff can go to 100% within 24 hours.
It's a service beat used for short term activity and has grown because for the last 15 years cash has not been an investment or safe to hold so it tends to be converted to safer assets. The beneficial owner then needs cash so runs a lending facility against assets.
It's also used so that wealth can be stored in one location but someone can live and shop in another without causing any issues.
It's all legit if you use a proper firm but you need to clearly appreciate what you're doing and the risks.
They can't hold client money and some other all of their products are outside the FSCS.
Collateralising is pretty common practice but as mooted by more than one person above, you don't want to opt for any kind of aggressive margin and nor do you want to use all the loan cash as you need a cash reserve for margin calls or margin changes.
Most people fall foul because they collateralise a load of illiquid stuff and fail to understand that a margin call on that stuff can go to 100% within 24 hours.
It's a service beat used for short term activity and has grown because for the last 15 years cash has not been an investment or safe to hold so it tends to be converted to safer assets. The beneficial owner then needs cash so runs a lending facility against assets.
It's also used so that wealth can be stored in one location but someone can live and shop in another without causing any issues.
It's all legit if you use a proper firm but you need to clearly appreciate what you're doing and the risks.
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