Use cases
Where portfolio secured credit earns its place.
Six situations where borrowing against a portfolio can be the better answer than selling it. Facilities are provided for business and investment purposes; every facility records a purpose declaration and is assessed against it. Illustrative scenarios, not client case studies.
Available to wholesale clients only, as defined in the Corporations Act 2001 (Cth). Not available to retail clients.
01 / Tax
A tax liability on investment or business income falls due.
The situation
A company, trust or investor receives an assessment on investment or business income that lands in a quarter when the portfolio is below where they would choose to sell, and selling now would also crystallise a gain.
How a facility helps
A facility secured against the eligible portfolio pays the liability on time. The holdings stay invested and the sale decision moves to a date and price of the investor’s choosing, or never happens.
What to weigh
Interest accrues until the facility is repaid. If markets fall, the position may need to be restored. Compare the cost of borrowing with the tax and market cost of selling, with your tax adviser.
02 / Settlement
Funds are needed before an investment or business transaction completes.
The situation
A sale of an investment, a distribution or a capital return is contracted but not yet paid, and a business or investment commitment falls due first: a completion, a capital call, a settlement on an acquisition.
How a facility helps
A short facility bridges the gap, drawn only for the weeks between the two dates and repaid when the proceeds arrive. Interest is charged only on the amount and the days actually drawn.
What to weigh
The bridge depends on the inbound funds arriving. If they are delayed, the facility runs longer and costs more, and remains subject to margining throughout.
03 / Business
A business needs capital without a trade sale or a dilutive raise.
The situation
An owner wants to fund an acquisition, a new site or working capital, and would rather not sell down the family portfolio or bring in new shareholders to do it.
How a facility helps
The portfolio secures the facility; the business receives the funds. Equity is retained, the investment portfolio keeps working, and the facility can be structured for a company or trust borrower.
What to weigh
The business purpose is assessed and documented. The portfolio, not the business, is the security, so a fall in markets can require action even when the business is performing.
04 / Investment
An opportunity arrives before cash does.
The situation
A placement, a private investment or an acquisition of a further holding is offered with a short window, and the investor’s capital is already deployed.
How a facility helps
A facility against the existing portfolio funds the new position without selling the old one. The investor decides later whether to repay from income, from a planned sale, or by refinancing.
What to weigh
Borrowing to invest increases both gains and losses. The new position may itself be eligible as security, or may not; that is assessed before any drawdown.
05 / Concentration
Most of the wealth is in one company.
The situation
A founder, executive or long-term holder has a large single-stock position, often under escrow or trading restrictions, and needs liquidity or wants to diversify without a forced sell-down.
How a facility helps
A facility sized for single-stock risk provides liquidity, or funds a diversified position alongside the holding, while the restriction period runs. The lending value reflects the concentration.
What to weigh
Concentrated holdings are the most exposed collateral there is: a sharp fall in one share can create a shortfall quickly. Facilities are assessed case by case and margined accordingly.
06 / Family
Funding moves between family entities.
The situation
A family group holds investments in one entity and needs capital in another: a trust funding an operating company, a holding entity backing the next generation’s business, an office rebalancing investments between structures.
How a facility helps
A facility secured by one entity’s eligible portfolio funds another, with guarantees where appropriate, documented to fit the structures already in place rather than forcing assets to move.
What to weigh
Each borrowing entity must meet the wholesale test. Superannuation funds, including SMSFs, cannot borrow. Structures are reviewed before terms are set.
Your situation