Borrow Fee

The Borrow Fee is the explicit or implicit cost paid by a borrower to a lender for the temporary use of a security, such as a Treasury bond or corporate debt, in a securities lending or repurchase agreement (repo) transaction. This fee, typically expressed as an annualized percentage rate, compensates the lender for the risk and opportunity cost associated with transferring the asset, and is a critical component in determining the profitability of short-selling strategies and the cost of funding in the money markets.