Margin Lending and Loans

Margin Loans - gearing into shares

Borrowing to invest, or gearing, gives you a wider range of investment opportunities and increases your potential returns.

For years Australians have been gearing into property, enjoying the profit potential of assets they could not otherwise afford. A margin loan helps you to put the same principle to work with shares.

For each dollar you invest, you are able to borrow from an approved margin lender up to 60%-80% of the cost of the shares depending on the margin lender’s leveraging ratio for that particular share.

Minc’s Margin Lending through Leveraged Equities

Minc offers a margin lending facility through Leveraged Equities and a trading platform which automatically calculates the amount of cash required for the particular stock’s leveraged ratio whereby your order proceeds direct to the market with the minimum of time.

IMPORTANT: Margin Lending multiplies gains and losses

Margin Lending is not for everyone. Borrowing money to invest multiplies the effect of both gains and losses in investments. Only investors who have the financial capacity to absorb the risks should contemplate using borrowed funds to invest. Under a margin loan you will be advanced a certain amount of money based on the value of your investments. This may be referred to as the "loan to value ratio" (LVR) the value being the value of your investments. If the value of your investments fall, the relative value of your loan will rise. If this results in your loan to value ratio exceeding the agreed limit, you may be required to contribute additional payments of capital to return your investment value to the agreed ratio. The payment of additional capital may have to be done in a very short time frame.

If you fail to meet a margin payment or "margin call" within the agreed time period as set out in the margin loan application, you will be required to sell a quantity of your investment/s to bring your ratio to the previously agreed level. You will not be able to "wait-out" any downturns in the market. A margin call can result in an actual loss in the capital value of your investment.

Before applying for a margin loan you must complete your own due diligence of the product and whether the product is suitable based on your own personal circumstances. You should consider the margin lender’s Product Disclosure Statement and any other information that forms part of the agreement.

It is extremely important to make sure that you understand margin lending thoroughly and are prepared.

To find out more about Leveraged Equities Margin Lending, please visit Leveraged Equities.