What Does An Ethical Stock Loan Look Like?

 A Few Question You Need To Ask In The Process. What exactly Is A Stock Loan? What Shape Should Appeal To A Borrower Compared To A Traditional Cash Lending Options? How Interest Plays A Role In My Overall Strategies, Short-mid & Long?. What Is In Place As Safeguards?

This type is a loan taken out with fully owned stocks of a publicly traded company as the pledged collateral. It is an incredibly effective way to monetize an equity position and get cash out.

Essentially Make Capital Market Work For You.

Any stocks I own?

No. Shares of publicly traded companies only. The company might be anywhere in the world, as long as it is publicly traded, are electronic and unrestricted.

What will I be liable for?

This is a non-recourse option. The recovery of the loan will be limited to the value of collateral. 

Will my credit be a determining factor?

As we mentioned, it is important to emphasize, no credit checks either personal or business for this kind of cash loan. There is no reason to. The loan is against the stock value, not you personally. 

How much can I get on a certain number of shares?

The loan to value ratio will be determined by a few factors like liquidity and risk predisposition. Our lender do however, provide a loan to value ratio can be found up to 80% for many stock loans.

Some loans offer low cash value, high interest, most will offer from $50K to $100Million.

How high is the interest?

Between 2.99% and 5.99% depending on the security and the factors discussed above. The more we borrow from a lender, the better the power to negotiate interest and terms.

What will be the terms for my securities?

None. Simple Lien, Pay Back Loan- Lien is lifted, Stock are yours free to do as you wish.

Will the lender control how I spend the money?

It is your money. Once the process is complete, funds are transferred and you can do as you please. No restrictions on borrower.

How long until I get the money?

Two to three weeks at maximum. The stock loan process is a very simple process. Lender offering smaller amounts of cash against your stock will have a quicker process the loan asap. without saying more cash process can go up to 2 weeks or more.

What will happen to my stock dividends?

The shares remain yours until you default and the lender has to recover the loan. Therefore, at maturity the client receives their shares back in addition to the dividends. Client may also choose to use the dividends to offset the interest due on the stock loan.

What if the value of my stock falls?

This is a risk but only to the lender. As it is in the case of non-recourse stock loans, the lender cannot demand compensation for the amount in excess of the value of the stock.

What happens if I cannot repay the loan?

A recap, walking away from the loan if the shares drop during maturity of the loan, in this case, the client forfeits the shares. Again this action does not affect the borrower’s credit worthiness. The lender lent the money against the stock, absorbs the loss. No business or personal liabiliities.

Who will own my stock until I repay the loan?

The shares will be kept safe in the client’s name in a custodian bank. The shares will not be reassigned, sold, traded or transferred.

Are there hidden costs?

 A securities loan is a very safe and transparent process in today's landscape. If a program charges upfront fees or you find hidden fee not in a discussion openly by your potential lender, look elsewhere!