Money Leveraging

Money Leveraging

Money Leveraging - The act of placing limited amounts of money to obtain the 'Use' of larger sums of money for a limited or specified period of time.

Example

Use 20% of a sum to obtain 100% of the money for a limited period of time.
Done on a bank-to-bank basis, but can be done through certain 'Traders' for private or corporate use.

Special Note

This is becoming more difficult to do, and the number of banks that participate are diminishing each year.

This depends on many factors, some of which are:

Ownership of the Money - Corporate (public listed company) is Highly Preferred
Source of Money - clean, clear, and non criminal origin
Where Funds are Held - Bank Rating as well as location (branch) of Bank
Whether Transaction is by owner or by an Agent, Security House, or Third Party Bank
Must be in US Dollars only
Market Conditions
Bank Policy
Client Anticipation of Return
Place Transaction Occurs
Transaction must be on a Bank-to-Bank basis only

What is done with 'Cash' after leveraging

This is becoming a paramount issue with banks. The preferred and acceptable method is to deposit a portion of the leveraged funds with the honoring bank, usually not less than 50% for a period of not less than six (6) months.

Hints

Leveraging is usually done by Traders or by public held corporations.
Leveraging by individuals is virtually impossible, and is highly questioned by banks and trading houses throughout the world.
It is generally easier to raise capital utilizing other methods.
Fluctuating World Market Conditions set the pace and determine the trading (leveraging) value, if any.
Often times other forms of collateral such as a bank instrument or stocks will be needed by the corporation, in addition to the 'Cash Funds', to do this type of transaction, and make up the total face value needed to obtain the leveraging.
Example...20m cash for 100m leverage would require collateral of another 60 to 80m.
Substantiated "Documentation' is needed for this type of transaction.