Margin Lending

Margin lending enable an investor to borrow money, add it to their own savings or equity, and use the total for investment purposes.

When an investor borrows funds using a Margin Lending Facility they choose their investments from an extensive list of approved managed funds and listed equities.

By adding borrowed funds to your own funds, i.e. by “gearing” your investments, the potential for greater returns is increased.

In general terms, a Margin Lending Facility will benefit the investor when the returns from the investment exceed the cost of borrowing. The greater rewards come from capital growth of the investments over a period of time. In addition, some taxation benefits may be possible whether or not you are paying the highest margin tax rate.

However, we strongly recommend investors seek professional taxation and financial advice before establishing a Margin Lending Facility.

Just as gearing an investment has the potential to increase returns, it can also increase the losses.

A Margin Lending Facility needs to be supported by the investor’s cash flow during times when the value of the investment falls. If the value falls, you may be required to invest further capital or reduce the loan balance- this is a margin call.

If you receive a margin call you will be advised in writing of the alternatives available to you to restore the loan to security ratio to an acceptable level.

Investments need to be chosen carefully to take into account capital growth and be tax effective income. A Margin Lending Facility should be used as a long-term investment, rather than for short-term speculative gain. It is the time in the market rather than the timing of that is important.

Two types of Margin Lending Facilities are offered:

Gearing Facility- for the larger, one-off or irregular investment amounts.

Regular Gearing Facility- for those wanting to make regular investments.

• These facilities are available to individuals, companies and trustees.
• Flexible repayment arrangements at competitive interest rates.
• Choice of variable or fixed interest rate terms.
• Extensive range of managed funds and share investments to choose from.
• Quick settlement of loan application.
• No application fees*

* Other fees and charges apply.

It is important that you fully understand the risks and rewards associated with margin lending. The information above is intended as a guide only and the full terms and conditions are available on application.