What Does a Business Loan Broker Do?

Bank loans to securities brokers and self-employed persons using securities held as collateral are called broker loans. A certain amount of security deposit is required for brokers' loans, that is, bank loans cannot be used for the purchase of securities in full, and a certain percentage of their own funds must be used for guarantee.

Broker loan

Right!

Bank loans to securities brokers and self-employed persons using securities held as collateral are called broker loans. A certain amount of security deposit is required for brokers' loans, that is, bank loans cannot be used for the purchase of securities in full, and a certain percentage of their own funds must be used for guarantee.

Guaranteed ratio means

(1) It provides an important way for the bank's asset liquidity and enables the bank to find new ways to use short-term funds. (2) Become a channel for money and capital markets. When the bank credit excessively flows into the securities market, the price of the securities market soars, the central bank increases the guarantee ratio, and the broker's loan decreases accordingly, reducing the amount of funds flowing into the securities market and returning the securities price to a reasonable price. When the securities price plummets, The central bank can reduce the guarantee ratio appropriately, and the loan to the broker will increase accordingly, so that the price of securities returns to a reasonable level.