Important: FG Capital Advisors arranges secured metal repo lines through first-tier custodial banks and credit funds. We only finance non-exchange receipts after a full warehouse and paperwork scrub.
5 Collateral Red Flags That Ice Metal Repo Deals— and How to Unblock Funding Fast
One funky receipt or a sketchy BL and your repo line flat-lines. We run into these five killers every week—here’s how to neutralise them before your lender nixes the ticket.
Red Flag #1: Warehouse Not on the LME Roster
Deal killer:
No LME rulebook means the lender can’t lock down control.
Quick fix:
Shift the metal into an approved shed or sign a three-party pledge that hands the keys to a top-tier custodian.
Red Flag #2: Mixed Brands with Foggy Origin
Deal killer:
Sanction landmines plus price guesswork—nobody wants mystery metal.
Quick fix:
Split the stacks by brand, attach origin certs, or carve out the murky bars and fund the clean tonnage.
Red Flag #3: Bills of Lading Not Consigned “To Order”
Deal killer:
Title chain snaps, fund counsel hammers the stop button.
Quick fix:
Issue switch BLs made “To Order” with blank endorsement. Racing the clock? Use an LOI backed by the shipper’s bank until the switches lodge.
Red Flag #4: Cargo in Transit Minus Insurance Assignment
Deal killer:
If the vessel sinks, the lender’s security goes with it.
Quick fix:
Assign the marine cover to the lender and name them loss payee. Extra premium? Usually under USD 2 per tonne.
Red Flag #5: Ageing Scrap Inventories
Deal killer:
Scrap corrodes, haircuts balloon, lenders bail.
Quick fix:
Re-grade and bale the lots, then lock in a take-out sale that starts when the repo does. The forward contract caps downside and drags the haircut back below 30 %.
FG Capital Advisors: The Fix-It Crew
Red flags land on our desk daily. Our lawyers draft switch BLs overnight, and ops can re-tag 5 kt of copper before Asia wakes. Got a messy file? Fire it over—24 hours later you’ll have a rescue map.
FAQ
Q: Will lenders ever accept non-LME warehouses?
A: Yes—if the shed signs a control agreement and meets daily reporting rules.
Q: How old is “too old” for scrap?
A: Anything past twelve months without re-inspection usually triggers a ten-point extra haircut.
Q: Can insurance be wrapped into the repo advance?
A: Often, yes. We pre-fund the premium and net it at drawdown.
This material is marketing copy and does not constitute legal, tax, accounting, or investment advice. All terms remain subject to credit approval and market conditions.
