Taking a cash loan from your stocks is essentially a leveraged trade. You have pulled money out while keeping your stocks, therefore you have increased your leverage. As an example, let's say I have $320k in stocks. Without any loan, my leverage ratio as defined above is:
Both notional exposure and portfolio equity is equal, so my leverage ratio is 1. Let's say I now pull out $100k in cash, taking a margin loan. My leverage ratio becomes: