Archive for the Securities Lending Category

Most UK borrowing – personal loans, standard mortgages, business loans – is recourse by default, meaning the lender can pursue you personally for any shortfall after a default, even after your security has been repossessed and sold. Non-recourse lending genuinely exists in the UK, but only in specific, narrower circumstances most borrowers never encounter. Understanding which category your specific borrowing falls into matters more than the interest rate alone. The Genuine UK Default: Recourse Lending In cases where a borrower defaults on a recourse loan and the sale of the secured asset doesn't generate enough to cover the outstanding debt, the lender can seek a deficiency judgment, pursuing the borrower's other assets or income to recover the remaining balance. This is genuinely the standard structure across UK personal loans, standard mortgages, and most business borrowing – worth understanding clearly rather than assuming otherwise. Why Property-Secured Loans Are Almost Always Recourse Our Secured Loans (Second Charge Mortgages) and Homeowner Business Loans pages both cover genuinely recourse lending structures – if your property doesn't fully repay the debt on sale, you remain personally liable for the shortfall. This is worth understanding clearly before assuming your exposure is limited purely to the valueRead more →

Borrowing against your investment portfolio genuinely offers a fast, tax-efficient way to raise capital – but around 7% of investors have experienced a margin call at some point, rising to 23% among investors under 35. Understanding both the genuine appeal and the real risk before you commit matters more here than with most other forms of borrowing. Why This Route Genuinely Appeals Borrowing against your portfolio rather than selling avoids crystallising a Capital Gains Tax liability immediately, and keeps you invested through any subsequent market recovery rather than exiting your position entirely. For someone confident in a holding's long-term prospects, or facing a large tax bill on disposal, this can be considerably more capital-efficient than selling outright. A Genuine Worked Example of the Risk Consider an investor pledging a £10 million portfolio to borrow £6 million at 60% loan-to-value. If equity markets fall 20%, the portfolio drops to £8 million – but the loan remains at £6 million, pushing the effective loan-to-value to 75% and breaching the lender's agreed threshold. At this point, the lender can issue a margin call, requiring you to top up collateral or reduce the loan quickly. If you can't respond fast enough, the lender mayRead more →