Customer's loan(redirected from Customers' 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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
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