Sell or Borrow? What’s the Smarter Way to Access Cash?

You’ve built up your investments...now you need cash fast. Should you sell or borrow? The answer could grow your portfolio more than you think.

Life Happens
It’s a regular day. You're minding your own business, maybe scrolling through your EasyEquities app, admiring that R50,000 portfolio you’ve been steadily building. It’s a mix of ETFs, high-quality shares and you’ve done everything right.

Then boom. Life happens.

Your car breaks down. Your dog needs surgery. That “can’t-miss” investment opportunity pops up. Or maybe... you just need a break and want to go somewhere. Anywhere.

Whatever it is, you need R15,000 now. But your bank account is screaming, “Sorry, we only do debit.”

So what do you do? You look at your portfolio like it’s a piggy bank. “Maybe I should just sell some shares?”

Hold up. Before you hit that “sell” button, let’s slow it down for a sec.
Because while selling your shares is one way to get the cash you need, it’s not the only way. Depending on your goals and outlook, there may be another option that helps you access funds without giving up on your investments.

Let’s explore the two routes you can take, so you can choose what feels right for you.

• Option 1: Sell some of your investments
  You get the R15,000 you need, no strings attached. Clean, fast, done.
  But your portfolio is now R15,000 smaller. That might mean less future growth, possible tax to pay, and the risk of missing out if the market rebounds right after you sell. Timing the market is tricky, even for pros.
  
  
• Option 2: Borrow R15,000 against your portfolio using EasyCredit.
  You keep every cent invested, your shares keep doing their thing, and you get the cash. It’s a loan, yes, but it comes with a built-in growth engine: your portfolio has the potential to keep compounding in the background.

Here’s What Happens Over 12 Months: Sell vs Borrow

Let’s look at a simplified, hypothetical example. Let’s say your portfolio is worth R50,000 and the market grows by 15% this year (which is pretty average for strong equity markets). Here's what that might look like if you sell vs borrow.

We’ll break it down step by step:

• Both options give you cash now. That’s the easy part.
  
  
• But when you sell, your investment base shrinks to R35,000, so your potential growth also potentially shrinks.
  
  
• Borrowing with EasyCredit means you keep the full R50,000 invested, so your growth is potentially higher.
  
  
• Yes, you pay interest on the loan (R2,062), but your extra growth (R7,500 vs R5,250) still leaves you ahead.
  
  
• And when the loan’s paid off in 12 months, your portfolio is still intact, there's no need to “buy back in.”
  
  
• Oh, and you avoid capital gains tax, which can eat into profits if you sell.

What is EasyCredit Anyway?

It’s a loan that’s backed by your investments.  You don't need to sell a thing. You can borrow up to a third of your portfolio (capped at R300k), and repay it over 12 months. Interest is prime + 3%, paid monthly. You settle the original loan amount at the end.

1.  Markets are moody. What if you’re forced to sell during a dip? You lock in a loss and miss the rebound. With borrowing, you can stay in the game.
   
   
2. EasyCredit has the potential to allow that compounding continue.
   
   
3.  Selling your shares can trigger capital gains tax. Borrowing? No sale, no tax.

 A Smart Tool But Still a Loan
Let’s be upfront: while EasyCredit can be a powerful way to access cash without selling your investments, it’s still a loan and it comes with responsibilities.

• You’ll pay interest.
  
  
• The full amount must be repaid in 12 months.
  
  
• Your portfolio acts as collateral for the loan. If its value drops significantly, EasyEquities may partially or fully liquidate your investments to recover the outstanding amount. This could result in the sale of your assets at an unfavourable time, including during a market downturn.
  
  
• Borrowing against your investments involves risk. Make sure you understand the repayment terms, interest charges, and potential consequences before proceeding.
  
  
• Declines in the value of pledged securities can trigger margin calls or forced liquidations, potentially at unfavorable prices. This may lead to losses or shortfalls if collateral becomes insufficient.

So don’t borrow recklessly. Don’t use it to fund your next shopping spree or a second air fryer. Use it with intention.

• You have a strong, diversified investment portfolio
• You believe the market will grow over the loan period
• You’re able to cover monthly interest payments
• You have a clear plan to repay the full loan within 12 months
• You want to remain invested and stick to your long-term strategy

In short: use EasyCredit as a tool, not a shortcut. When used wisely, it can help you manage short-term needs while keeping your long-term goals on track.

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