The Broker isn't allowed to borrow against client money either - it's client money, partitioned off from the broker's fungible funds, and not the Broker's to offer as collateral.

But debt is the natural answer, and Robinhood did get as much in loans as they can[0].

[0]https://finance.yahoo.com/news/robinhood-said-draw-credit-li...

>what the brokerage needs to do is take a loan against the settled cash they are already holding in escrow for ~24 hours.

and that's exactly what they did. On thursday night they secured a $1B loan.

That's not exactly what they did. What they did was to get $1B in funding against other assets that are actually theirs.

Just because your house is worth $1M doesn't mean that I (being "not you") can go get a mortgage pledging your house as collateral.