Definition of "Borrowing Power"

Dollar amount that clients can buy securities on margin. The margin limit is dependent on the type of security--usually 50% of a stock's value, 30% of a bond's value and 100% of a cash equivalent's value (i.e., money market funds). Buying power can also refer to securities hypothecated (pledged) to a lender as loan collateral. The lender's policies and the type of security determine the collateral's loan value.