Your Collateral (AKA, Loss Reserve) is a required initial deposit that your Sivo Debt line is secured against.
Before you can activate your Sivo Debt line, you must deposit your Collateral into your Sivo Account.
After your Collateral initial deposit, your Sivo Debt line will start out as 1x leverage with a limit that reflects the available balance of your Sivo account. If the balance of your Sivo account is $1,000,000, you'll be able to borrow up to $1,000,000 from Sivo.
The balance of your Sivo Debt line is secured against funds in your Sivo account. In other words, your initial Collateral functions as cash collateral for your Debt line.
Overtime, your leverage will increase as long as the performance of your Debt line is in line with its initial risk assessment. This approach provides originators with fast access to debt capital while working toward increasing their leverage over time to 2x, 3x, 4x, and so on. Some of our customers even reach 10x of their initial Collateral.
When you achieve 10x leverage, an initial $200,000 Collateral deposit will unlock up to $2,000,000 from Sivo.
PRO TIP: don’t have the cash available for the full initial Collateral? No problem! Deposit as much as you can to activate your line and complete your Collateral over time. Your leverage timeline will adjust accordingly automatically.