This section covers the frequently asked questions regarding Institutional Loans on Binance. If you have further questions or suggestions, please contact your client representative or contact us.
Users are no longer limited to a single account for margin collateral, unlike with traditional Margin and Futures products. Institutional Loan functions as a credit line facility, granting users the ability to choose multiple subaccounts and wallets as collateral accounts. This enhances capital efficiency by permitting users to aggregate collateral from various subaccounts and wallets to obtain an Institutional Loan for Margin and Futures trading on Binance.
 Please note: Sub Account 1, Sub Account 2, and Sub Account 3 are the collateral accounts for Institutional Loan Sub Account 4. | |
| Eligibility | KYB & VIP 5 volumes and above, or users who meet Binance Margin eligibility requirements |
| Loan Limit | $1 to 10 million (Contingent upon collateral) |
| Leverage | Up to 4x |
| Borrowable Assets | USDC & USDT |
| Supported Collateral & Collateral Haircuts | Spot: BTC,ETH,USDT,USDC,SOL and BNB (No Collateral haircuts) PM: All supported PM Collateral (Collateral haircut applies, please refer to Collateral Ratios) Cross Margin: All Supported CM Collateral (Collateral haircut applies, please refer to Collateral Ratios) |
| Supported Modes |
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There is no separate agreement to sign, however please note that by using the Institutional Lending Service you acknowledge that you have received, read, understood and accepted all of the terms and conditions (Institutional Lending Terms), as updated and amended from time-to-time, together with any additional documents or terms referred to in these Institutional Lending Terms, and you acknowledge and agree that you will be bound by and will comply with these Institutional Lending Terms.
Users can have 5 at the same time.
Only Portfolio Margin or Portfolio Margin Pro is supported.
Yes, however the Flexline account must be closed before the Institutional Loan can be established.
Repayment must be initiated from your Institutional Loan account. Ensure that sufficient funds are available in this account to cover the loan amount. If necessary, transfer the required amount to your Institutional Loan account. Once the funds are available in your Institutional Loan account, please reach out to your Sales / KAC representative, who will then help to organize the repayment. There are no penalties for early repayments and you can borrow & repay multiple times up to your assigned limit.
It can be checked via API, the API is currently limited to calls from the Parent UID only. Clients must input the "Group ID" when using the Parent UID for API calls, and we will provide this at the time of drawdown. Please see Institutional Loan API Portal.
The API will return components associated with the "Group ID," including Net Equity, MM, Total Liabilities, Total MM, Total Net Equity, and the current LTV.
If a user wishes to transfer collateral outside the risk unit, they should use the response components to calculate the potential new LTV. Users must ensure the new LTV remains below liquidation thresholds to avoid triggering immediate liquidation. If the new LTV exceeds these thresholds, users might need to reduce the transfer-out amount.
Broker, Managed Sub Accounts, Fund Manager, and Binance Wealth tagged sub-accounts are not eligible to be used as collateral accounts. Additionally, any account currently serving as a collateral account for VIP Loan, Flexible Rate Loan, or Flexline products cannot be used as a collateral account for the institutional loan account.
You can allocate up to 10 sub accounts as a collateral account for any given Risk Unit.
Is it possible to designate the parent account as the collateral account for the Institutional Loan?
Unfortunately this is currently not supported.
Unfortunately this is currently not supported
If you wish to add a collateral account to a Risk Unit, please reach out to your designated VIP Account Manager. To remove a collateral account from a Risk Unit, full repayment of the loan is necessary.
Unfortunately, if an account is currently being used as collateral for VIP Loans, you will not be able to link it as a collateral account for the Institutional Loan. Similarly, if the account is linked as a collateral account for an Institutional Loan, it cannot serve as collateral for VIP Loans.
The supported collaterals for the spot wallet include BTC, ETH, USDT, USDC, SOL and BNB, without any haircuts.
The collaterals supported for Portfolio Margin and Cross Margin encompass all those available for both portfolio margin and cross margin, with applicable product haircuts. For Cross Margin please refer to here, Portfolio Margin please refer to here.
This is due to Binance's policy of not placing the user's account in reduce-only mode or disabling trading capabilities when certain thresholds are reached, thereby offering users increased flexibility in risk management. The loan is not overcollateralized since users have the freedom to trade and/or utilize the assets on the Binance platform.
We will request the UID from the user designated to receive the institutional loan before setting it up. To trade margin and futures, users are required to open a Portfolio Margin Account or a Portfolio Margin Pro account under this UID. The loan will subsequently be issued to this UID.
Based on the mode chosen by the user, the relevant margin/futures product rules, logic, product availability/restrictions, and terms will be applied, alongside the LTV thresholds for the Institutional Loan Group Risk Unit and the Institutional Loan terms and product availability/restrictions.
The Risk Unit LTV formula is:
LTV = (Outstanding Loan Principal + Outstanding Loan Interest) / (Aggregated net collateral - Aggregated Maintenance Margin).
Where Aggregate net collateral:
∑Equity in all collateral PM sub account + ∑Equity in Credit Line Account (PM) + ( ∑Collateral Value - ∑(Liability + Interest) in Cross Margin account + Free accepted tokens in spot
Where Aggregate Maintenance Margin:
| PM | ∑Maintenance Margin =∑ futuresMM*assetIndexPrice + ∑MarginMM*assetIndexPrice |
| Cross Margin Classic | 10% * total liability |
| Cross Margin Pro | ∑Maintenance Margin =∑( [Liability + Interest] * Maintenance Margin Rate) |
| Spot | 0 |
What steps are taken during a Liquidation for the Institutional Loan Risk Unit?
When the Risk Unit LTV reaches 90%, liquidation is triggered. The process will stop once the Risk Unit LTV drops below the margin call LTV of 85%. During this time, new borrowing and transfer-out functions are disabled for all collateral accounts.
If the Risk Unit LTV rises to 85%, it will trigger a margin call, prompting an email notification to the user. It is strongly recommended that users take this opportunity to add additional collateral to reduce liquidation risk.
To mitigate risks associated with its Institutional Loan, Binance implements the following measures:
The Risk Unit LTV formula is:
LTV = Outstanding Loan Principal + Outstanding Loan Interest / Aggregated net collateral - Aggregated Maintenance Margin.
Where Aggregate net collateral
∑Equity in all collateral PM sub account + ∑Equity in Credit Line Account (PM) + ( ∑Collateral Value - ∑(Liability + Interest) in Cross Margin account + Free accepted tokens in spot
Where Aggregate Maintenance Margin
| PM | ∑Maintenance Margin =∑ futuresMM*assetIndexPrice + ∑MarginMM*assetIndexPrice |
| Cross Margin Classic | 10% * total liability |
| Cross Margin Pro | ∑Maintenance Margin =∑( [Liability + Interest] * Maintenance Margin Rate) |
| Spot | 0 |
Aggregate Net Collateral Calculation
Sub Account | Asset Type | Asset Details | Haircut | Index Price | Value (USD) |
1 | Portfolio Margin | BTC: 40 BTC at $100,000 each | 95% | 100,000 | $3,800,000.00 |
ETH: 5 ETH at $1,000 each | 95% | 1,000 | $4,750.00 | ||
Total | $3,804,750.00 | ||||
2 | Portfolio Margin | SOL: 10,000 SOL at $200 each | 90% | 200 | $1,800,000.00 |
XRP: 200,000 XRP at $2 each | 85% | 2 | $340,000.00 | ||
Spot | USDC: 2,000,000 USDC | 0% | 1 | $2,000,000.00 | |
Total | $4,140,000.00 | ||||
3 | Spot | USDT: 500,000 USDT | 0% | 1 | $500,000.00 |
Total | $500,000.00 | ||||
4 | Institutional Loan | USDT: 2,000,000 USDT | 99.99% | 1 | $1,980,000.00 |
Total | $1,980,000.00 | ||||
Total | $10,424,750.00 | ||||
Note: Spot assets have no haircut, hence their value is not reduced. | |||||
Aggregate Maintenance Margin Calculation
Sub Account | Asset Type | Margin Liabilities | Leverage | MMR | Maintenance Margin (USD) | Maintenance Margin Calculation |
1 | Portfolio Margin | 2,000,000 USDT | 3x | 10% | 200,000 | (2,000,000 X 10% X 1) |
2 | Portfolio Margin | 500,000 USDT | 5x | 8% | 40,000 | (500,000 X 8% X 1) |
Aggregate Maintenance Margin | 240,000 | |||||
Group Risk Unit LTV Calculation
Group Risk Unit LTV = Outstanding Loan Principal + Outstanding Loan Interest / Aggregated net collateral - Aggregated Maintenance Margin.
Group Risk Unit LTV = 2,000,000 / (10,424,750 - 240,000)= 2,000,000 / 10,184,750
Group Risk Unit LTV = 19.63%
DISCLAIMER: This document is accurate at the time of publication. Binance reserves the right to update the guidelines from time to time. Please verify the accuracy of the information below with the VIP team before proceeding.
Disclaimer and Risk Warning: Digital token prices are subject to high market risk and price volatility. The information provided does not constitute, in any way, a solicitation or recommendation or inducement to buy or sell the products. The value of your investment may go down or up, and you may not get back the amount invested. Cross-margining contributes to providing greater leverage than a regular margin account, and greater leverage creates greater losses in the event of adverse market conditions. There is increased risk that a user's cross-margin positions will be liquidated involuntarily, causing possible loss. Comments and analysis do not constitute a commitment or guarantee on the part of Binance. You are solely responsible for your investment decisions and Binance is not liable for any losses you may incur. Past performance is not a reliable predictor of future performance. You should only invest in products you are familiar with and where you understand the risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. This product may not be available in certain countries and to certain users. This content is not intended for users/countries to which prohibitions/restrictions apply. For more information, see our Terms of Use and Risk Warning. To learn more about how to protect yourself, visit our Responsible Trading page.
