Here are some of the most common questions we get asked about investment loans.


About Investment Lending

What are the pros and cons of investment lending?

There are a lot of pros and cons to investment lending and your advisor can discuss them with you. One pro is that it has the potential to generate wealth. But, on the other hand it can be risky because any investment losses are magnified.

Read the facts about investment lending.

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Getting Started

I’m interested in taking out an investment loan. How do I start the process?

The first step is to talk to your advisor to see if an investment loan is right for you. Next, if you agree it fits into your financial plan, your advisor will complete an investment loan application and begin gathering all the required documentation.

Will I qualify for an investment loan?

We look at a number of different criteria to determine whether you’ll qualify for an investment loan. Do you have:

  • capacity to handle the amount of debt (based on your Total Debt Service Ratio)?
  • sufficient capital (or net worth, which is a measure of your assets minus your liabilities)?
  • a good credit score?
  • the ability to pay your bills on time and manage your current debts well?
How much should I borrow?

That depends on a lot of factors: your financial objectives, risk tolerance, cash flow, and time horizon.

You and your advisor will work together to figure out what your number is to reach your financial goals.

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Managing Your Loan

If I take out a loan, can I pay it off early? Is there any penalty?

Our investment loans are fully open, which means that they can be paid off at any time with no penalty.

Can I take money out of my investment account?

If the value of the investments you purchased with your loan exceeds the outstanding balance of your loan, you may be able to take out the excess amount from your investment account.

Remember, the loan-to-value (LTV) ratio must stay within our guidelines. Talk to your advisor to figure out if and when you can take money out.

Are the interest payments tax deductible?

Generally speaking, interest paid to borrow money to earn investment income is tax deductible. When the interest is deducted, it can be an effective way of reducing the overall cost of an investment loan. Interest is not deductible in all circumstances. For example, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid. Additional restrictions apply for residents of Quebec. Please consult with a tax specialist for information on deducting interest.

Can I view my investment account online?

Yes, you can view your investment account (the account where your loan proceeds are invested) online through Investor Access.

Can I pay down the loan online, via online banking?
  1. No, we are unable to accept lump sum loan payments through online banking. If you wish to pay down your loan, you need to contact your advisor.

What happens to my loan if there is a big drop in market values?

Depending on what type of loan you have, you may or may not need to do anything.

If you have a margin call loan, you may need to act and you should speak with your advisor to see what actions may be necessary.

If you have a no margin call loan, we won’t require any action – but you can always speak with your advisor to determine what’s right for you.

Reminder: The original amount of the loan remains payable even in the event of a large decrease in market value.

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Contact your financial advisor today to see if an investment loan is right for you.

B2B Bank does not provide investment advice to individuals or advisors and does not endorse or promote any investment products. While investment loans have the ability to magnify gains, they also have the potential to magnify market losses. Leveraging involves greater risk than purchasing investments using only your own cash resources because it has the potential to magnify investment losses. The dealer and advisor, not B2B Bank, are responsible for determining the suitability of investments for their clients and for informing them of the risks associated with borrowing to invest. B2B Bank acts solely in the capacity of lender and loan account administrator. Any loan approval from B2B Bank should not be construed as an endorsement of any investment choice, program or strategy. All loans are subject to credit approval and borrowed monies are due and payable regardless of the performance of the investments purchased. B2B Bank reserves the right to request additional information or documentation at its sole discretion. The B2B Bank Investment Loan Program is available exclusively through licensed financial advisors. ®B2B BANK is a registered trademark of B2B Bank.