Benefits of a Non-Recourse Stock Loan from a Private Stock Loan Lender Liquidity is a major reason executives, insiders, and ultra-high net worth individuals consider non-recourse stock loans in meeting their fast cash and liquidity needs. Let’s take a look at some of the other advantages this type of financing offers. 1. Borrower not personally liable for the loan. 2. Privacy and non-disclosure, you may not be required to disclose to others, for privacy many borrowers prefer this feature. 3. Opportunity for a clean balance sheet that leaves room for other refinancing and acquisition opportunities that can make you more attractive to other lenders. 4. You can walk away from the loan, the day after the loan is funded and not be liable for any future interest payments or principal payments with a non-recourse loan. 5. In the case of default, the lender can only seize the collateral pledged for the loan and cannot go after any of your other personal assets. You are safer with a non-recourse loan and have more options and security than a recourse bank loan or a margin loan. 6. You do not have to disclose liability on financials, to partners, or other financial lenders due to the fact that you are not obligated to pay back the loan. This major benefit is why you may want to structure this for privacy, so it does not impact your personal financial statement. 7. Better product than a bank, minimal paperwork and fast closings – Private lenders can move quickly, no red tape and offer a streamlined stock loan process. No need for financials, no credit checks, or business plans written out. 8. Personal credit, tax returns, etc. not required – no tax returns from multiple years like traditional banks require, which is a far more complicated process. 9. You reap 100% of the rewards of
Read more →Pledged Share Stock Loan If you’ve ever thought about pledged share refinancing your share portfolio but were scared of the heavy lifting, chances are, you have been missing out. When the average stock portfolio holder can release cash from their existing portfolio at rates of around 3% thats not something to be sniffed at – don’t you think it’s time to stop stalling and consider your stock portfolio refinance options? There are generally two motivations for people to refinance their share portfolio – using the money to purchase another asset and pulling out equity from their stock portfolio to re-invest– you needn’t wait for these justifications to consider getting a loan to leverage your portfolio in a bull market. One motivation is internal – I want to acquire more assets – and the other is external – we want to do something, such as renovate or go on a holiday or pay off debt. So, the stock portfolio owner looks to stock loan brokers to see if there is a way to pull the equity out of the share portfolio by refinancing. Considering most stock portfolio owners never leverage up their stock portfolio its amazing how many investors are missing out on be able to take advantage of the good times using reasonable leverage of their share portfolio or even single stock portfolio. What happens after a few years is your loan situation changes. Your stock portfolio value goes up in value and you have a better loan to value ratio. Many investors do not realize the power and advantages of refinancing their existing stock portfolio using a pledged share stock loan but there are lenders out there that will happily provide the lending they require either for re-investment into the markets or for any other asset purchases they may
Read more →
Why Application Problems Of A Bank Loan When You Can Secure A Stock Loan On Publicly Listed Stocks Let us face it – no one particularly likes to deal with a bank. Banks give money to those who do not need it and make it difficult for those who do, and protect their backsides in every case. If you are looking for a large loan, there is almost always a non-refundable due diligence fee. If you get approved that you are worthy after multiple meetings, a huge pile of presenting documents, and an interrogation that lasts hours under a bright hot light, then you have to offer everything you have. Security, performance and financial covenants, legal guarantees from yourself, your business, your management, and your grandma! And to top it off, for the life of the loan and banking relationship they want to know every detail through detailed and time-consuming reporting. Do these problems (diligence fees, approval process), stumbling blocks (reporting, covenants, etc.), and roadblocks (collateral and security!) sound a pain to you? The adage “it takes money to make money” remains true in banking, even more so as banks clamp down during this time of the pandemic. If you are in the market for a sizeable amount of capital, from $1 million to over $250 million – let me propose an alternate financing method that has a different orientation. A Stock Loan Versus A Bank Loan – Which I Quicker? A problem-free Stock loan originated through Platinum Global Stock loans from our panel of over 20 direct lenders. The non-recourse loans are made against publicly traded shares. The only criteria for obtaining a loan against eligible shares you own are demonstrating your ownership and transferring them to a custodian account. Non-recourse means there is no other security besides your
Read more →What are bridging loans? A bridging loan (or ‘bridge loan’) can be useful if you need to borrow money for a short period. It can help to ‘bridge the gap’ if you want to buy a new home before selling your old one. Or if you need to release cash for business purposes secured against u residential or commercial property. How does a bridging loan work? There are two types of bridging loan: ‘closed’ and ‘open’. Closed bridging loans With a closed loan, there is a fixed repayment date – you will normally be given this kind of loan if you have exchanged contracts but are waiting for your property sale to complete. Open bridging loans With an open loan, there is no fixed repayment date, but you will normally be expected to pay it off within one year. Whichever kind of loan you take out, the lender will want to see evidence of a clear repayment strategy, such as using equity from a property sale or taking out a mortgage. They will also want to see evidence of the new property you are purchasing and the price you plan to pay for it, as well as proof of what you are doing to sell your current property if relevant. You should also have a back-up plan in place in case your repayment strategy fails. First and second-charge bridging loans? When you take out a bridging loan, a ‘charge’ will be placed on your property. This is a legal agreement that prioritizes which lenders will be repaid first should you fail to repay your loans. Both a first and second charge bridging loan take your property as security in case you default on repayments. Typically, if you still have a mortgage on your property, the bridging loan will be a
Read more →There are several exciting opportunities – for new and existing property developers – including energy efficient developments, conversions of retail units to flats and proposed reforms of the planning system by the government. As a result, we are seeing an increase in development inquiries so we have created this short introduction to development finance to help clients – existing and new – understand the type of projects that development finance can be used for, the costs involved and how the funds are paid. What is a development finance? There are several exciting opportunities – for new and existing property developers – including energy efficient developments, conversions of retail units to flats and proposed reforms of the planning system by the government. Property development finance is a type of short-term, secured finance that is used for many small, medium, and large-scale property projects, including renovations, office block conversions or to purchase and build on previously undeveloped land from the ground up. Development finance is used by many different types of people from private individuals to portfolio developers and small to large companies. Unlike a traditional mortgage, development finance is a short to medium term loan that is secured against the projected gross value rather than the current value of the land/property. It can be complicated so it is beneficial to use an experienced broker. What can development finance be used for? What are the different types of development finance? • Residential property – development finance may be used to build one or more house, convert an office block or retail unit into houses/flat, build an apartment block or renovate a residential property. This can be used by developers looking to sell or rent the property or individuals looking to build their dream home. • Commercial property development – used to build
Read more →Chinese tycoons Jack Ma and Joe Tsai have pledged part of their combined $35bn (£25bn) stake in Alibaba in exchange for large pledged share loans from investment banks. The share pledges, which were made to lenders including UBS, Credit Suisse and Goldman Sachs, were made by offshore companies that control half of the two billionaire’s stake in the eCommerce giant, which totaled 5.8 per cent in December. The amounts of the share pledges were not disclosed but the pair have repeatedly borrowed against their stock since Alibaba’s US listing in 2014, according to documents seen by the Financial Times. Share pledges allow banks to accept stock as collateral for loans but the borrower retains ownership of the shares. Ma and Tsai, who are Alibaba’s two largest shareholders, have used the loans to access vast fortunes tied up in shares. According to the report, Tsai’s Gulfstream 650ER private jet is mortgaged to Credit Suisse. The Swiss bank, which oversaw the company’s IPO, also lent to a shell company linked to Ma’s purchase of a mansion in Hong Kong and a new plane the same model as Tsai’s. Alibaba said Ma did not have any outstanding loans borrowed against its stock while Tsai’s outstanding loans were “easily manageable” with “prudent loan-to-value ratios to provide [a] substantial cushion against triggering a margin call”. The company added that share pledges were “ordinary financial planning to provide liquidity and diversification without having to sell shares in Alibaba”. Alibaba Group Holding Ltd.’s largest individual shareholders Jack Ma and Joe Tsai pledged parts of their combined $35 billion stake in the e-commerce giant in exchange for significant loans from banks, the Financial Times reported, citing company documents. The share pledges were made by offshore companies controlling more than half of the duo’s stake in Alibaba, which stood
Read more →