Stone Creek Capital Management

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Margin Loans for Self-Managed Investment Portfolios

Stone Creek, through leveraging our broker-dealer relationships, is consistently able to provide its clients very competitive margin loan rates. The ability to obtain low interest rates on margin loans can help put your investment assets to work with more borrowing flexibility.*

Interest rates are now as low as 1.81%.

Margin Loan Interest Rates
Loan Balance Rate
$0 - $500,000 3 Month LIBOR + 1.15% = 2.46%**
$500,001 - $1,000,000 3 Month LIBOR + 0.80% = 2.11%**
$1,000,001+ 3 Month LIBOR + 0.50% = 1.81%**
  **Rates as of July 25, 2017

**Lower rates may be available with larger sized loans.

What is a Margin Loan?

Margin loans are personal loans that borrow against the securities in your self-managed portfolio to get cash. Typically, margin loans are tied to a variable rate structure and offer more flexibility and more favorable rates than other borrowing sources.

The money can be used to purchase securities or for a range of personal financial needs, from debt consolidation or refinancing to paying off a mortgage, to paying for college costs or a dream vacation.

How Margin Loans Work

The amount you can borrow on margin depends on the type and value of securities in your self-managed portfolio. To purchase securities, the amount is usually limited to 50 percent of the value of your marginable securities. You must maintain equity in your portfolio of at least 30% of the total account value, depending on the eligible securities you hold.

If the equity in your portfolio falls below the minimum maintenance requirement, you’ll have to deposit additional cash or collateral. If you cannot meet your minimum, you could be subject to a margin call and we may have to sell securities from your portfolio, with or without your prior approval. Before borrowing on margin, be sure to discuss with your Stone Creek advisor the risks associated with margin loans and have risk mitigation strategies in place.

Requirements for Margin Lending

Initial Equity Requirements

The amount of money you can borrow on margin toward the purchase of securities is typically limited to 50 percent of the value of marginable securities in your account (subject to eligible securities), but can increase for certain bonds. However, it is prudent to borrow less to minimize risk. [Federal Reserve Board Regulation T allows brokerage firms to lend clients up to 50% of the total purchase price of a stock.

Our custodian further requires that the equity in an account be at least 30% of the current market value of the security (subject to certain restrictions). To begin borrowing, you must have at least $100,000 in cash or marginable securities in your account with us and be fully aware of the risks that the margin strategy would impose.

Once you borrow on margin, you are required to maintain a certain amount of equity in your account, depending on the securities you hold. Typically, that collateral requirement is at least 30% of the total account value, but it can be higher for certain securities or accounts.

Stone Creek will calculate your buying power and cash available for withdrawal, and provide you with that information in your account summary.

Benefits and Risks of Margin Loans

Margin loans offer more flexibility, ease of transaction and lower rates than other types of borrowing. You can repay a loan at your own pace, as long as you maintain the required equity in your portfolio. You might be able to deduct the interest against your net investment income.

Margin loans are not right for everyone. Margin borrowing increases your level of market risk. If you purchase securities with a margin loan and the underlying value of those securities goes down, you must still repay your loan.

If the equity in your portfolio falls below the minimum maintenance requirement, you’ll have to deposit additional cash or collateral. If you cannot meet your minimum, you could be subject to a margin call and we may have to sell securities from your portfolio, with or without your prior approval.

Before borrowing on margin, be sure to discuss with your Stone Creek advisor the risks associated with margin loans and have risk mitigation strategies in place. Maintenance Requirements

About Stone Creek Capital Management

Stone Creek Capital Management is an affiliated company of Biltmore Capital Advisors, an independent, SEC registered investment advisor based in Princeton, New Jersey. Stone Creek was formed to offer a platform whereby investors can leverage an institutional infrastructure, performance reporting, research and more and make their own decisions without the help or advice of an advisor.

*Margin loans are offered through unaffiliated third party broker-dealers.