Impact of forming a trading entity on credit/All kinds of issues with becoming a professional

E

eaglefeather

This post might be a somewhat different flavor, I reside in the US, and although I've thought about the possible benefits for forming an entity to trade, it's not for tax reasons.
I am reaching a plateau whereas I am starting to trade more like a business, I trade stocks, ETFs, options, mutual funds, I invest for yield, I do all these things, and often I do not finance these with my own money. I use borrowed funds, it's like a sort of arbitrage.
At first borrowing money was scary, but after a while, it's just logic. I am not a 90/90/90 guy anymore, my drawdowns are minimal. I do have a day job.
Are there traders out there that have left their day job, and do you trade as an individual or as an entity? I am not aware how easily I can secure financing for a venture under an entity versus my own credit.
Also, consider here in the States, financial institutions are really technically NOT supposed to lend money for to invest (I am not talking about margin here). This includes stocks and bonds if I am correct.
I have wondered how professionals circulating six figures account for various credit lines they may maintain, it's not like you can go to a car dealer and say, well yes I have 200K in outstanding credit, no job, but look I make 70K a year, just wouldn't seem like it would work, so the lifestyle at first glance would seem to be self limiting.
 
What I am presenting is the hypothetical situation of a person transitioning from having a day job to being a full time trader/investor (without a day job of course). Thanks for asking because this is the point of the thread. In the US, an investor is not a business, or an occupation. So for those transitioning into a lifestyle of professional investing as an individual, there arises certain problems, such as how do you get a mortgage without a job per se?, tell the bank you are a professional investor? There are certain unanticipated problems with the dream :)
 
Lots of things depend on what exactly you need money for. What product, overnight vs intraday, is there anything you can reasonably collateralize, etc.

Most trading firms have borrowed money before. Who you borrow from depends on the trade. I borrow from a bank because it fits best with what I'm trying to do. In some situations I'll borrow from my clearing firm (also a bank).

My point is that by the time you have a valid use case for borrowing money you should be able to do it. But there are many things to check off the list before that would become a priority
 
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