Customer's loan

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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 ?
Sainsbury's Bank launched into the larger loans market on 15 October 2014 offering both new and existing customers loans of up to GBP35,000 at 6.
Reducing customers loans by an average of $121,000 in forgiving principal while modifying first mortgages
New Green Additional Borrowing offers existing Nationwide mortgage customers loans of between PS5,000 and PS20,000 to fund a variety of non-structural, energy efficient home improvements.
New Green Additional Borrowing offers existing Nationwide mortgage customers loans of between PS5000 and PS20,000 to fund a variety of non-structural, energy-efficient home improvements.
The article begins with the recollection of the 1992 Los Angeles riots when Benjamin Hong, president & CEO of Nara Bank, took decisive action to offer existing customers loans of up to $100,000 without asking for collateral.