Borrowed assets from Flexline go directly into your main wallet. This means that you have the flexibility to trade them, move them to Kraken Futures (where available), use them in Earn, or withdraw them. However you may be restricted from certain actions that would decrease your available margin below zero. This is due to Kraken’s funding model. Both margin trading and Flexline operate under the same funding framework, with borrowing capacity determined by a shared available margin balance. You can view the available margin figure in the portfolio view within the web, mobile, or desktop apps.
As mentioned, Flexline borrowed assets go directly into the spot wallet and are directly fungible with other balances of the same currency. Since all assets in the main wallet are considered eligible collateral, trading from one currency to another results in a decrease in available margin if trading from an asset with a lower collateral haircut to one with a higher collateral haircut. For a list of these collateral haircuts, please see here.
Withdrawals have a significant impact on available margin since withdrawn funds are no longer considered as eligible collateral. Therefore you will be limited in the funds able to be withdrawn dependent on main wallet balance, unrealized PnL of margin positions, and outstanding Flexline loans. The maximum withdrawal amount per currency is displayed in the withdrawal page of that currency.