Former President Donald Trump has been indicted with criminal charges by a federal grand jury on Aug. 1, charging him with four crimes in an alleged effort to overturn the 2020 elections. Now, many wonder what will happen to his $425 million in cash following this latest indictment.
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“Despite having lost, the Defendant was determined to remain in power. So, for more than two months following election day on November 3, 2020, the Defendant spread lies that there had been outcome-determinative fraud in the election and that he had actually won. These claims were false, and the Defendant knew that they were false,” the indictment reads.
This is Trump’s third indictment, which comes amid a presidential campaign and the ensuing fundraising efforts. But as CNBC reports, Trump’s lucrative Save America political action committee (PAC) is now down to $3 million, after having raised $100 million in 2022. And according to an NBC News analysis of new campaign finance reports filed with the Federal Election Commission, Trump’s PAC has spent more than $20 million on legal fees alone, making payments to more than 40 different law firms in the first six months of 2023.
Against this backdrop, the former president’s increasing legal woes might hinder his finances as some of his banking relationships have been cutting ties with him. As The Washington Post reported, the former president’s longtime lender and several banks with his deposits cut ties with him following the Jan. 6, 2021 attack on the Capitol at a time when Trump had hundreds of millions in loans coming due.
Little-known Axos Bank, which specializes in loans to borrowers other banks had shied away from, came to his rescue, providing him with millions in loans, likely “with much stiffer terms than Trump usually accepts because of his urgent need for a lender,” The Washington Post reported. This proved “vital to stabilizing his post-presidential finances and enabling him to mount the campaign that now has him leading the GOP pack for the 2024 presidential nomination.”
Now, as Forbes reported, there is relatively good news for Trump, as recent dealmaking and loan refinancing has left him with $425 million in cash- which could be helpful for future borrowing.
Yet, in the face of an indictment, the financial standing of an individual — even someone as high-profile as Donald Trump — can face intense scrutiny, said Andrew Boyd, managing director of Finty.
“Trump’s reported $425 million in cash, however, does provide him with a significant cushion. If lenders become reluctant to engage due to the indictment, this liquid asset could sustain his ventures or be used to repay his debts,” said Boyd, adding that while an indictment might deter traditional banks, alternative lenders, such as hedge funds or insurance companies, might still be willing to lend, albeit likely at higher interest rates.
Boyd added that the recent connection with Axos Bank and the successful negotiation of liabilities, coupled with a considerable amount of liquid cash, indicates some flexibility in dealing with the fallout of the indictment.
“The course of the case, along with the responses of other stakeholders, may alter the situation, but the immediate financial impact might not be as devastating as one might presume given the amount of cash on hand,” he added.
Other experts echoed the sentiment, saying that Trump’s reported $425 million in cash does not automatically disappear with an indictment. However, it could be affected depending on the specifics of the charges and potential legal outcomes.
According to Sammie Ellard-King, personal finance advisor of Up The Gains, in legal proceedings, if the charges were severe and proven, courts might require a hefty bail or fine. In addition, he said, litigation can be an expensive process, leading to significant legal fees. However, he also noted that it’s also important to remember that indictments often take years to proceed through the courts and the outcomes can be uncertain.
“If Trump is able to maintain his liquidity and the indictment does not lead to asset seizures, the cash may remain relatively untouched. Lastly, Trump’s various loans and business debts could still impact his cash reserves, regardless of an indictment,” added Ellard-King.
He added that when considering the future of someone’s finances in light of legal troubles, it’s crucial to understand that an indictment is just the start of a lengthy legal process. It does not guarantee guilt, nor does it immediately freeze or seize personal assets.
“Often, the full impact on the individual’s financial status may not be apparent until the conclusion of the legal proceedings. Therefore, speculation on Trump’s financial state post-indictment may lead to premature conclusions,” he said.
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This article originally appeared on GOBankingRates.com: Trump Reportedly Has $425 Million in Cash, What Happens to It After an Indictment?