Clients of SWP have a new and unique opportunity to borrow up to 75% of the value of their gold and silver by receiving a low-interest rate loan issued by SWP Capital. Use the cash to invest in other assets, pay down debt or however you would like. Apply to borrow today.
Clients of SWP Capital can
by using their gold and silver as collateral security in support of a metals margin loan granted by SWP Capital.
Margin loan proceeds can be used by clients to increase their investment in precious metals through SWP, invest in other assets and/or increase their liquidity position.
SWP Capital will lend up to 75% of the market value of precious metals held with SWP that are segregated in the client’s precious metals account and secured by a repurchase agreement. The minimum loan amount is USD $250,000.
|1 Year or less||2 Years||3 Years||4 Years||5 Years|
|$501k - $1m||4.00%||4.25%||4.50%||4.75%||5.00%|
Complete an SWP Capital Metals Margin Loan Application for review and approval. If you don’t currently meet our criteria, we can chat about how to best increase your holdings for your desired loan amount. Applications are turned around within 48 hours.
Once SWP Capital approves your margin loan you can borrow up to 75% of the market value based on the spot price of the specified number of ounces pledged to SWP Capital as collateral security. This portion is known as the initial margin equal to 135%.
When you repay the outstanding principal balance borrowed, SWP Capital will instruct SWP to release the segregated precious metals used as collateral back into your SWP account.
A margin loan is a simple loan agreement that follows a few rules. The primary one being that a maintenance margin must be maintained at all times. A maintenance margin is defined as the minimum market value of collateral equivalent to 120% of the margin loan limit.
In the event the market value of the collateral falls below the maintenance margin of 120%, SWP Capital will ask you to add to the collateral, sell collateral and/or inject cash to pay down the outstanding principal balance under the margin loan, that will be sufficient to restore the maintenance margin. When this happens, it's known as a margin call.
A margin call is effectively a demand by SWP Capital to restore the maintenance margin. If you do not meet the margin call, SWP Capital can instruct SWP to sell sufficient collateral to restore the maintenance margin. SWP Capital can do this without your approval, but only if you fail to meet your margin call within 5 business days. In the event the market value of the collateral falls below the liquidation margin of 110%, SWP Capital will immediately instruct SWP to sell sufficient collateral to restore the maintenance margin. You are responsible for any costs associated with maintaining your margin requirements during the term of the loan.
Let's say that a Borrower holds a market value of $2 million in gold bullion with SWP and wishes to borrow $1 million to purchase more gold to add to their position. To borrow $1 million, the Borrower would need to set aside $1.35 million in gold in a segregated portfolio with SWP as collateral for their margin loan from SWP Capital, representing a 135% margin (the ‘initial margin’).
By purchasing an additional $1 million in gold bullion with loan proceeds, the Borrower’s total position with SWP would equal $3 million of which $1.35 million has been used as collateral security with SWP Capital.
Let’s say that the market value of gold drops and the value of the segregated portfolio drops to $1.19 million. This would mean that the margin between the outstanding margin loan, say it remained at $1 million, would now drop below 120%, the ‘maintenance margin’. At this point a margin call would be triggered and SWP Capital would require the Borrower to either, increase the amount of collateral held with SWP in favour of SWP Capital or sell sufficient precious metals held in their segregated portfolio to paydown the margin loan to restore the maintenance margin of 120%. The Borrower would be given 5 business days to do so.
In the event the Borrower does not restore the maintenance margin, or the market value of the segregated portfolio does not restore the maintenance margin, SWP Capital will instruct SWP to sell sufficient precious metals held in the segregated portfolio to restore the maintenance margin.
In the event the market value of the segregated portfolio drops further, and the margin cover drops to 110% or less, SWP Capital will immediately instruct SWP to sell sufficient precious metals held in the segregated portfolio to restore the maintenance margin. The Borrower would be notified after the fact.
Metals Margin Loan Amount: minimum $250,000.
Interest Rate: Fixed for the term of the loan.
Term: 6 months to 5 years.
Repayment: Interest only payable annually in advance, with a balloon payment of the outstanding principal balance at the end of the term, unless renewed.
Arrangement Fee: 1.5% of the amount borrowed, 50% payable at time of the loan application and 50% upon drawdown of the Metals Margin Loan. The fee covers administrative and legal fees associated with making available SWP Capital Metals Margin Loans, vetting and approving applications, arranging funding and documentation.
All loans and repayments are in USD.