Benefits of equity-backed finance


How it works

You can use your existing equity portfolios as collateral for a loan. The top 100 companies by market capitalisation listed on the JSE as well as selected international investments qualify as collateral.

The amount you can borrow depends on the level of diversification, volatility and liquidity of the shares in your equity portfolio. The value of the portfolio is monitored on a daily basis, and as long as your loan – as a percentage of the value of your portfolio – remains below a pre-determined level, there are no collateral requirements.

If your loan (including unserviced interest) exceeds this pre-determined level, additional collateral will be needed.

The pre-determined level also depends on the level of diversification, volatility and liquidity of the shares in your equity portfolio.

The minimum portfolio required to act as collateral is R1 million. There is no requirement to service the loan, and interest is calculated and capitalised monthly, using the daily outstanding balance.

The criteria used to determine the interest rate charged include the size and duration of the loan, and the quality of the collateral offered (for example, diversified versus single stock exposure).

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