There is a crucial distinction between the loans we offer, securities financing, and the more commonly issued recourse loans. Both loan types include borrowing money in return for collateral. With recourse loans, however, the lender can come after much more than what you put up as collateral, and failure to repay the loans can result in

When you borrow for a personal or business-related purchase, such as a vehicle or a tractor, you typically enter into what’s known as a recourse loan. This means that you are fully responsible to repay that loan by whatever means necessary, including not only repossession of the asset(s) you bought with the loan, but any other assets necessary to repay the full loan amount. If your financial situation suddenly changes, this can leave you in a dire predicament, with years spent digging yourself out of a financial hole.

Then there’s the type of loan we offer: non-recourse loans from our securities lenders. With security-backed loans, you don’t have to worry about a major change in your financial situation or the value of your pledged securities, because you can walk away from the debt at any time, problem-free.

Why our securities financing loans are the right choice:

No credit checks

No requirement to repay, no effect on credit if you terminate the loan early

Walk away from the loan at any time

You never lose ownership of your shares. Keep earning a return while enjoying liquidity.

Protect yourself from major capital losses. If the value of your share suddenly falls, simply walk away from the loan.

There are several reasons you may decide not to pay your debt, and relinquish the securities you pledged, but the most common reason is that the value of those securities has fallen dramatically. For this reason, a stock loan is a responsible way to hedge against your position in a company while still enjoying the returns on your stocks. Often, you’re the returns on your stocks will beat the low interest rate we charge, making our loans a responsible, efficient way to maintain liquidity in your portfolio.

Reasons stock loans are favorable to you:

  • Non recourse effectively allows for default without further penalty or action. This is a unique feature of this type of securities lending and does not impact the borrowers credit rating.
  • It requires neither proof of employment nor income, and in fact this form of stock lending requires no credit check. Finally, loans can be approved and closed within a very short period of time, typically from 3 to 7 days, allowing the borrower to quickly access the needed funds.
  • Because the loan is fully collateralized by the borrower’s stock, this type of non-recourse stock loan can be offered with a minimum of personal paperwork.
  • The benefit of a non recourse stock loan is if the share price of the stock drops significantly in value, you can simply walk away from the loan with no personal liability.

What Is A Non-Recourse Stock Loan?

A non-recourse stock loan is a type of loan that uses shares in a publicly-traded company to secure the loan. It is an excellent way for individuals and business owners to tap into the value of their stock easily and quickly without having to wait too long for the money.

Stock loans can be a critical financing source for entrepreneurs. A stock loan is a resource they can quickly access to fund business operations.

The loan amount is determined by a loan to value (LTV) ratio which means the loan amount may be equal to 50% of the value of the shares needed to secure the loan.

In addition to other criteria, the maximum loan amount available to a borrower depends on:

  • Market conditions
  • Historical stock price and volume performance
  • Total number of shared owned
  • Market sector

Why Would Someone Want A Stock Loan?

The ability to convert a majority of the current market value of securities into cash without selling them outright is an attractive option for many shareholders. With that value unlocked from their shares, individuals and business owners can get the liquidity they need with ease and without visiting the bank.

What Are The Benefits of A Stock Loan?

Liquidity – Stock loans are a fantastic option when an individual or business owner needs a quick financing option. It turns equity into cash with ease.

Interest-only – No ambiguous or hidden charges; stock loans are an interest-only, transparent loan option. There are no never-ending charges that seem to extend the credit unnecessarily.

Accessible – Stock loans are available to almost anyone. You don’t need a credit check to access one for your individual or business needs. The process is painless and straightforward, and your money is delivered to you most conveniently.

Privacy – It provides borrowers with a trustworthy source of capital. All transactions are private and kept in strict confidence.

Competitive – A  Stock loan offer you competitive and flexible interest rates. You typically receive better terms than you would get from a traditional marginal loan.

How to Qualify For A Stock Loan

Step One

Complete our online contact form

To start applying for a stock loan, you would need to complete the loan contact form. We will respond to you within 15-30 minutes from the time of your request during business hours. If you apply after business hours, expect a response within the first hour of the next business day.

Step Two

Our team will be in touch to solidify the details

After receiving and reviewing your loan request from our contact form, one of our experienced managers will reach out to you to confirm your information. The manager will also discuss the logistics of your loan and the next steps.

Step Three

Receive your money promptly in the most convenient way

Once the manager has clarified and discussed the logistics of the loan with you, your application and required paperwork will be processed speedily. We will then deliver your money in the most convenient (as indicated by you in your application form) manner.

By on March 26, 2021   /   Blog  
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