Investment Loans

An investment loan has the potential to generate greater returns for your client than a traditional investment strategy. Here’s why:

• Accelerates savings through a larger initial upfront investment and compound returns.
• Compound returns on an investment means that returns are calculated not only on the initial investment, but also on the accumulated growth from year-to-year.
• 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 lending strategy. Interest is not deductible in all circumstances.

There are potential opportunities to reduce overall cost of an investment lending strategy through tax deductions. A lump sum investment starts compounding right away, rather than waiting to build your savings with a traditional strategy. Investment gains have the potential to reach financial goals faster

For example, if the only earnings produced by the investment are capital gains, interest paid cannot be claimed. Additional restrictions apply for residents of Quebec. Please consult with a tax specialist for information on deducting interest.

Leveraging involves greater risk than purchasing investments using only your own cash resources because it has the potential to magnify investment losses. You are required to repay the loan, including interest, regardless of the investment return.