Carton Wealth offers a low interest rate by eliminating expenses and fees charged by custodians like Charles Schwab. Instead of negotiating interest rates with Charles Schwab, we help you directly access the institutional borrowing market on stock exchanges for your clients.

We do this with a strategy called box spreads. Read more about box spreads here.

Carton Wealth uses "box spreads" constructed from listed S&P 500 Index options. You can think of box spreads as standardized loan contracts traded at stock exchanges. They have competitive pricing from the bid-ask process on the stock exchange. Read more about box spreads here.

Carton Wealth works like a line of credit. Your client can keep a balance open, potentially indefinitely. There are options to lock in a fixed interest rate too.

This line of credit is implemented with a month-to-month box spread strategy. That means every month Carton Wealth will implement a new box spread to take out a loan from the stock exchange, paying back the expiring box spread loan if needed.

We recommend clients to make interest-only payments to cover the interest expense from each month. They have the option to include the interest from each month in the loan principal.

Client can pay off the loan arranged by Carton Wealth at any time. They do so by depositing the payment in their own brokerage account, and instructing Carton Wealth to exit the box spread loan from the market.

Carton Wealth has a much lower minimum compared to other lenders of securities-backed loans. Our minimum loan size is $10,000.

Carton Wealth takes about 1 week to onboard a client. Once onboarded, the client can withdraw money at any time.

There is no limit on the purpose of the borrowed funds.

Carton Wealth charges 0.50% of the amount borrowed by the client on an annual basis. This fee is subject to volume discount and case-by-case negotiations.
annually
For example, if a client borrows $100,000 for 6 months, they need to pay a management fee of $100,000 * 0.50% * 6 / 12 = $250.

In general, you are allowed to borrow up to 50% of your non-retirement investments. We are happy to review the specific portfolio of your clients to give you a definitive answer.

Carton Wealth has comparable margin call risk as margin loans or securities-backed line of credit.

Because Carton Wealth uses box spread options to reduce the cost of borrowing, there are additional risks:
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- Interest-rate risk: Box spreads used in the Carton Wealth Securities-Backed Lending Program involve a fixed payoff on a future date, which functions like a zero-coupon bond. It has the same interest rate risk as any other fixed-income investment.
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- Execution risk: In extreme market conditions (e.g. market closures) or due to technical difficulties, Carton Wealth might fail to roll over the box spreads due to lack of liquidity in the market. In this case, the client will automatically take out a margin loan and may need to pay margin interest, until execution is restored.