Warwick Credit has created a new product known as ‘Portfolio Secured Credit’. In creating the offering, Warwick Credit has partnered with Nedbank Private Wealth to offer clients a line of credit utilising their voluntary investment portfolios as security.

How does the offering work?

  • Clients can receive up to 40% of the value of their investment portfolio in cash.
  • The line of credit acts as a facility with no monthly repayments required.
  • Clients will have access to withdraw additional cash, or make payments back into the credit facility at any time.
  • A daily ‘no surprises’ monitoring discipline is applied to reduce downside risk and monitor the investment and credit values.
  • The line of credit will be allowed to increase to a maximum of 50% of the investment portfolio value.

Benefits of the offering?

  • No Capital Gains Tax is incurred compared to selling your investment to generate cash.
  • A simple and streamlined process for approval and transacting.
  • Access to liquidity – provides access to cash without having to sell investments.
  • Your long-term investment strategy remains in place.
  • Market-related interest rates, with below market initiation and service fees.
  • No facility fees payable on the portion of the facility not utilized.
  • Potential for enhanced returns – the power of gearing has the potential to provide higher returns.
  • You will deal directly with your Warwick Wealth Specialist or Planner on the credit facility.

Important criteria

  • Minimum credit facility of R100 000.
  • Should your credit limit be exceeded, a cash payment is required. Alternatively, investments can be sold to reduce the credit value.
  • A detailed credit policy is available to explain the credit values and collateral.

What can the cash be used for?

  • The cash can be used for any purpose, this includes bridging finance, retirement or holiday property, vehicles, local or international investment, medical expenses, home improvements, debt consolidation, business capital and the education costs of your children and or grandchildren.

Why use your portfolio as security?

  • Compared to many other assets, shares and unit trusts are considered to be an excellent form of security. They are valued daily and therefore, you can see their underlying value at any time. As an asset class, shares and unit trusts are also very liquid, they can thus be sold easily and one does not have to sell the entire investment to generate cash, as would happen with other assets such as property.

Interest and fees

  • The interest rate is only Prime +1%. This is calculated daily on the outstanding balance and only deducted at the end of each month.
  • A market-leading, once-off, initiation fee of R950 and monthly service fee of R55 (Excluding VAT) are the only costs, there are no hidden fees or charges.