Stock Loans and Non Recourse Stock Loans As Borrowing Options

By on 19 January 2023   /   Blog  
Tags: , , ,
Stock Loans and Non Recourse Stock Loans As Borrowing Options

Stock Loans and Non-Recourse Stock Loans As Borrowing Options Stock Loans and non-recourse stock loans are a type of financial instrument that allows an individual or organization to borrow money using their stock portfolio as collateral. In contrast to traditional loans, non-recourse stock loans do not require the borrower to provide any personal or corporate guarantees. This means that the lender has no claim to the borrower’s assets or income in the event of default. The purpose of non-recourse stock loans is to allow individuals or organizations to access the equity in their stock portfolio without selling their shares. This can be beneficial for those who wish to maintain their investment position or for those who are prohibited from selling shares due to insider trading regulations. Additionally, non-recourse stock loans can provide a source of liquidity for businesses that are experiencing cash flow difficulties or are looking to expand their operations. Non-Recourse Stock Loans The process of obtaining a non-recourse stock loan begins with the borrower identifying the stock portfolio they wish to use as collateral. The lender will then conduct a thorough analysis of the stock portfolio, including an assessment of the underlying assets and the market conditions. The lender will also consider the borrower’s creditworthiness and ability to repay the loan. Once the lender has determined that the loan can be approved, the borrower will be required to pledge their stock portfolio as collateral. The lender will then place a lien on the stock portfolio, which gives them the right to seize the shares in the event of default. However, the lender will not have any claim to the borrower’s other assets or income. The terms of the loan will vary depending on the lender and the borrower’s creditworthiness. Typically, non-recourse stock loans are short-term, with a maturity

Read more →
Back to Top

Can I Obtain A Loan Using My Stocks As Security

By on 19 January 2023   /   Blog  
Tags:

Can I Obtain A Loan Using My Stocks As Security Yes, you can get a loan using your stocks as collateral. This can be known as borrowing against your investment portfolio. This type of loan is called a margin loan. A margin loan allows you to borrow money from a broker using your stocks as collateral. The amount you can borrow is typically a percentage of the value of the stocks you own. The interest rate on a margin loan is typically higher than a traditional loan, as the stock market is more volatile and there is a higher risk for the lender. To get a margin loan, you’ll need to open a margin account with a broker. Once your account is open, you’ll be able to borrow money using your stocks as collateral. You’ll need to have a certain amount of equity in your account to be able to borrow money. This is called the minimum margin requirement. When you borrow money using your stocks as collateral, you’re essentially borrowing against the value of your stocks. If the value of your stocks goes down, you’ll need to add more money to your account to maintain the minimum margin requirement. If the value of your stocks goes up, you’ll be able to borrow more money. It’s important to be aware that when you borrow money using your stocks as collateral, you’re taking on additional risk. If the value of your stocks goes down, you could end up owing more than the stocks are worth. This is called a margin call, and it’s a situation you’ll want to avoid. To avoid a margin call, you’ll need to keep an eye on the value of your stocks and make sure you have enough equity in your account to maintain the minimum margin

Read more →
Back to Top

The Nuances Of A Stock Loan And Their Benefits

By on 23 December 2022   /   Blog  
Tags: ,

The Nuances Of A Stock Loan And Their Benefits A stock loan, also known as securities lending, is a financial arrangement in which an investor borrows a specific number of shares from a lender, typically a brokerage or financial institution, with the intention of selling the borrowed shares and repurchasing them at a later date. This process is known as “short selling.” There are several reasons why an investor might choose to engage in short selling, including to hedge against market volatility, to profit from a declining stock price, or to raise cash to cover other financial obligations. Regardless of the motivation, stock loans can be a useful tool for sophisticated investors who understand the risks and rewards of this investment strategy. However, it’s important to note that stock loans come with their own set of risks and complexities. For one, the investor is responsible for paying any dividends that are paid out on the borrowed shares while they are in their possession. Additionally, the investor must maintain a sufficient amount of collateral to cover the value of the borrowed shares, as the lender has the right to sell the collateral if the value of the stock declines. One of the primary risks of stock loans is the potential for a “short squeeze.” This occurs when the price of the borrowed shares increases significantly, causing the investor to incur significant losses. This can happen if, for example, the company’s financial performance improves unexpectedly, leading to a surge in the stock price. Despite the risks, stock loans can be a useful tool for investors who understand how they work and have a clear plan for managing their risk. Here are a few tips for those considering a stock loan: Understand the terms of the stock loan: It’s important to carefully review

Read more →
Back to Top

Platinum Global Bridging Finance Arranges A EUR15m Bridging Loan For Paris Apartment

By on 18 November 2022   /   Blog  
Tags: ,

Platinum Global Bridging Finance Arranges A EUR15m Bridging Loan For Paris Apartment What was the bridging loan situation? We were recently approached by a high net worth (HNW) client – a British citizen residing in Monaco – who wanted to refinance his existing property finance loan on his large stately home in Paris. He was looking to secure a loan of circa €15 million and wanted to remove his existing lender and release equity to renovate the home situated over 4 floors in Paris. It was clear to us that once the initial improvements were made on the property that the property’s value would increase by up to 30% making it close to EUR20m in value. The client would then refinance the international bridging finance with a French bank. What was the lending issue? Our client’s options were limited for a few reasons. Firstly, the sheer size of the single unit was an issue. Secondly, with this being a truly unique asset with nothing similar in the area, there were no comparables – our client had developed his beautiful stately home to a very high standard. Thirdly, there is a limited number of lenders who are happy to support bridging loan deals in France. This meant, as opposed to the usual range of 300 plus lenders available to us, we had less than 8 lenders we could approach. What was the bridging loan process? We took advantage of our extensive list of lenders and our specialist team sourced a lender sophisticated enough to gain a good understanding of the client’s background and future income. With this being a very technical deal, it required a considerable amount of underwriting based on the individual, rather than pure asset-based lending alone. As such, we carried out a thorough presentation, highlighting the strengths of our

Read more →
Back to Top

Pledged Share Stock Loans Increase Year on Year Allowing Clients To Access Better Stock Loan Financing

By on 8 October 2022   /   Blog  
Tags: , ,

Pledged Share Stock Loans Increase Year on Year Allowing Clients To Access Better Stock Loan Financing Pledged share stock loan financing is more popular than ever as an alternative source of liquidity for significant shareholders in UK-listed companies. We explore the reasons why the market has reached new highs in the last two years – and what will drive its growth from here. Loans backed by pledged shares in UK-listed companies are taking off as a growing number of investors look to raise money from their shareholdings. Platinum Global are an institutional investment broker that specialises in long-term asset-backed financing. The number of equity-backed loans disclosed by directors of UK-listed companies more than doubled in 2020 compared with the previous year. Based on the trend observed so far in 2021, the transaction count is also on course to grow again in the full year, although the volume of loan proceeds raised may decline. Share pledges disclosed by directors in the year to August were worth over £412 million at the time the transactions were made public, compared with almost £2.4 billion in all of 2020. Using a typical industry loan-to-value (LTV) ratio of 65%, We calculate that these pledges translated into loans worth some £1.55 billion in 2020 and £269 million in the year to August 2021. Pledged Share Stock Loans These figures provide new insight into the evolution of share-backed financing, which is commonly referred to as Lombard lending in the UK. Market observers see it becoming increasingly broad-based, developing from a tool for high-net-worth individuals with billions of dollars of assets into an increasingly mainstream source of funding. Indeed, the more recent LSE data shows that share-backed financing is being used by a wider range of individual investors looking to raise smaller amounts of capital against shares in

Read more →
Back to Top

Stock Loans and Share Loans – We Explain More About Them In This Article

By on 6 April 2022   /   Blog  
Tags: , , , , ,

Stock Loans and Share Loans – We Explain More About Them In This Article You are a high net worth individual or financial institution or perhaps a high level company executive. You have a valuable company or personal stock portfolio and don’t want to sell any of it to meet a current cash need. A non-recourse stock loan is a financial tool that you might consider in meeting your cash and liquidity needs. Let’s look at some of the most common questions we are asked. What is a stock loan? A stock loan is what it sounds like, it is a loan against the value of shares of stock you own. We lend based on a portion of the value of the shares of stock that you designate as collateral for the loan. Typically we will lend on up to 80% of the value of the shares, though in some cases it might be a bit lower based on the volatility of the underlying security, or other factors based on our analysis. We provide a fully non-recourse stock loans in amounts ranging from $250,000 all the way up to $500 million plus. A high percentage of our loans are in the $200 – $300 million range. We offer a low fixed interest rate of 3%, with terms ranging from 3 to 10 years. Your shares serve as collateral for the loan. They are held in a third-party, fully regulated, fully licensed brokerage account for your safety and ours. You can use virtually any publicly traded shares of stock to secure the loan. This includes companies traded on major exchanges, penny stocks plus international stocks traded on some exchanges worldwide. Among the stocks and other securities that are eligible for our program include: ·   Penny stocks/emerging growth stocks priced under $1.00 with

Read more →
Back to Top