Customer's loan

Customer's loan

Agreement signed by a margin customer that allows a broker to borrow margin securities up to the level of the customer's debit balance to help cover other customers' short positions.

Customer's Loan

An agreement that a client may make with a brokerage allowing the brokerage to borrow the client's margin securities to cover short sales and fail to delivers made by other clients. Margin securities are securities that the client uses as collateral in order to borrow from the brokerage and buy other securities. Even though the brokerage possesses the margin securities, they still belong to the client. As a result the brokerage must have a customer's loan agreement on file to use the securities for other purposes. A customer's loan agreement should not be confused with a margin agreement. See also: Margin account.
References in periodicals archive ?
The court decision to make banks revisit their customer's loan agreements has triggered a cascade of advertising, text messages and cold calls from call centres insisting the client has taken out PPI, all of which go against the grain for Pam.
Loan service representatives, using Web browsers, can provide fast response to customer inquiries by having immediate access to all the documents related to a customer's loan.
The advisers can now discover how a customer's loan application is proceeding and head off potential problems or delays before they happen.

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