non-purpose loan

Definition

General-purpose loan collateralized with securities. Normally an investment bank can lend up to 90 percent of the collateral value of the securities, provided the loan proceeds are not used for buying more securities. Otherwise (under Federal Regulation T) only 50 percent of the collateral value can be lent and (under Federal Regulation U) the borrower must submit an affidavit (purpose statement) disclosing the purpose of the loan.

Use non-purpose loan in a sentence

You may want to try and take on a non-purpose loan if you think that would be the best way for you to proceed.

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They created a number of non-purpose loans to be included with the securities so that they could sell them to all their investors.

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When my brother wanted to buy a new Porsche, he did not bother getting a car loan but instead used his securities as collateral for a non-purpose loan.

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nonpublic information non-qualified retirement plan