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.

  1. Non-recourse means there is no other security besides your shares and no right to recourse in any other way by our direct lenders, the lender if you default on your loan.
  2. The purpose of the loan is not a criterion. Of course, we will want to discuss your goals with you to ensure the loan and requirements will meet your needs, and walk you through every step of the process. But the purpose of the money can be as personal as buying a yacht – it just does not matter.
  3. There is no non-refundable fees upfront. Once loan documents are executed, there are an origination fee and documentation fee withheld from loan proceeds.
    You can back out at any time in the process right up to prior to your loan proceeds being forwarded – without any cost or penalty.
  4. Headache free – you do not have to bend over backwards. There are no quarterly financial updates to prepare. There are no covenants to manage day by day, month by month. There is a fixed interest payment to plan for once per quarter. And that is how simple it is.

Problem free – if at some point you face foreboding default on your bank loan covenants or terms you face the perils of assessing the legal morass of what the bank can get, or not get, evaluating can you renegotiate, what is the impact on your company or you personally if your loan guarantee gets called – all these hazards just simply do not exist with a stock loan. If for whatever reason you elect to default on making the quarterly interest repayments, notify us that you forfeit the shares held in favour of the loan. No other action is required, and you cease payments and walk away. There are no other consequences, no credit reporting, no other recourse.

When we discuss this loan with you, we will help you plan for the event that the value of the shares held falls to a marginal level. In this event, there are three options that you can plan for in advance – you can provide more shares to restore the margin required, you can provide cash to bring the outstanding loan balance in line with the margin level or you can simply walk away.

Depending on the value and liquidity of the publicly traded shares you offer, a loan value provided to the asset value offered is usually 50-70% range, with virtually no upper limit on the amount of money available.

Contact the leading stock loan company Platinum Global Stock Loans who have access to over 20 specialist stock loan lenders today.

By on October 21, 2021   /   Blog  
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