Lending Services

StateTrust Lending Services offers several services to help our clients manage liquidity and enhance investment leverage.  Some of the lending services offered are:


  • Margin Lending - Allows clients to leverage the market value of marginable securities held as collateral to access funds for personal or business needs.  There are no annual fees, or fees associated with the application, activation, filing, or termination of this service.
  • Asset Backed/Portfolio Lending - Increases clients' borrowing power by pledging assets held in separately managed accounts as collateral for loans. This service features competitive interest rates, no preset monthly payments or prepayment penalty, flexible borrowing terms, and a quick approval process with no fees or closing costs.


If you want to buy securities, then you have two options for payment. You can pay the full cost due at once, or borrow part of the purchase price from StateTrust.  If you decide to borrow cash from us, then a margin account is set up for you.  Any purchased securities become our collateral for the loaned cash.  If the securities in your account lose value, the value of the collateral for your loan also goes down.  If this happens, StateTrust can take several actions to maintain the required equity in your account(s) including issuing a margin call (for the sale of assets), and/or selling securities or other assets that you hold.

Margin Accounts

StateTrust requires the opening of a Margin Account in order to make use of the lending facilities offered to clients. Margin lending requires that securities purchased under this facility be used as collateral for the margin loans made and that purchased securities remain in the margin account of the client.

Margin Accounts offer the following features:

  • No fees involved.
  • No credit checks involved as purchase assets are collateralized.
  • Immediate availability of funds.
  • Loans are subject to a variable interest rate called the "margin rate", which is calculated daily and applied against the daily margin balance.
  • Borrowers retain beneficial ownership of securities purchased with this facility.  They receive all dividends and appreciation.
  • Available lending up to 50% of the value of collateralized securities in the margin account.

It is important to fully understand the risks involved in trading securities on margin and this facility should only be used by experienced investors that understand and have the capital to withstand market volatility. 

It is also important to note that margin balances are subject to the prevailing margin rate and such rate may change daily.  Please consult with your financial advisor as to the risk of using a margin lending facility.

Margin Loans

Margin Loans represent the amount borrowed from StateTrust  to finance the purchase of securities through a margin account.

Purchasing and trading securities on margin involves taking additional risks:

  • You can lose more money than what was deposited in the margin account.
  • Margin Calls will be sent to you if the securities purchased on margin lose value. You may have to give StateTrust more money to avoid the forced sale of those securities or any other securities or assets held in your account(s).

Once you set up a margin account, StateTrust has the authority to sell securities or any other assets held in your account(s). If your account balance falls below the maintenance requirements for the margin account, or StateTrust's higher “house” requirement, StateTrust has the power to sell the securities or any other assets in your account(s) to cover the margin deficit; and the liability for any shortfall in the account(s) after the sale rests with you.

Margin Financing should be used by experience investors with the financial capacity to withstand market volatility. 

Margin Loans require the enforcement of the the following client procedures:

  • StateTrust can sell your securities or any other assets without contacting you first.  We will make every attempt to notify you about the margin call, but we are under no obligation to do so.
  • You cannot decide which securities or other assets in your account(s) will be sold or liquidated to meet a margin call.  Since the securities are considered collateral for your original margin loan, StateTrust has the authority to decide what to sell off.
  • StateTrust can increase its “house” maintenance requirements for margin accounts at any time we choose—we are not required to give you advance written notice. Any changes in our policy can often take effect instantly and might result in the issuance of a maintenance margin call.
  • You are not entitled to an extension of time on a margin call. StateTrust may, under specific conditions, grant extensions so you can meet your margin requirements, but we are not required to provide our clients with them.
  • The maximum value of a margin loan relative to the value of the underlying securities is set by the Federal Reserve Board.


Margin is the minimum amount of collateral and/or securities that must be held in a trading account in order to trade in a particular market or security and cover some or all the credit risk of the counterparty (Broker or Exchange). For some trading markets (such as futures, options, and stocks), the margin amount is set by either the Exchange or the Federal Reserve (through regulation T),  but for some other markets (such as the forex markets), the margin amount is set by the brokerage firm.

When a trading account is flat (no active trades), it will have its full amount of margin available for trading. When the trader enters a new trade, the amount of available margin is decreased accordingly. While the trade is active, the margin will remain unavailable as it is being used to cover the active trade. When the trader exits the trade, the margin will become available again, and can then be used to enter a new trade on the same market or any other market. If the balance of a trading account drops below the margin amount required for a particular market, the trader will not be able to enter any new trades on that market until the account balance is increased.


Margin Calls

A margin call is a notification by the trading brokerage firm (StateTrust) that informs the client that the balance in the trading account(s) has dropped below the margin requirements for one or more securities or open trades.


Leverage is investing with borrowed money, where you put some cash and obtain margin finance to purchase securities. It magnifies how much you can buy on your account as well as the gains or losses from the leveraged investment.

Ultimately, leverage is the relationship between debt financing and the equity collateralizing that financing, also known as the debt-to-equity ratio.

The risk of leverage can be substantial as it multiplies losses.  An investor who buys a stock with a 50% margin (or 2 times leverage) will lose 40% if the stock declines 20%.

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