Borrow Rate / Advance Rate Trade-off
For a borrower holding one lender’s quote, and deciding what to ask for instead.
Your bank quotes one advance rate at one borrow rate. That pair is a single point, and it is not the point that earns you the most on your own equity. These pages show which direction to push the quote, and what one extra point of advance rate is worth to you in extra points of borrow rate.
Model v2 — the two negotiation variables
The working calculator. Move the advance rate, the borrow rate and the asset return, and watch return on equity move with them. Compare a second offer against the bank’s.
Model v3 — what to add next
A written plan, not a calculator. It ranks the variables that move your return more than the borrow rate does. Not built yet.