Here are some answers that may help you with frequently asked questions
This 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.
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.
This is a non-recourse option. The recovery of the loan will be limited to the value of collateral.
We do not do credit checks for this kind of loan. There is no reason to. The loan is against the stock, not you personally.
The loan to value ratio will be determined by a few factors like liquidity and risk predisposition. Our lenders do however, provide a loan to value ratio of up to 80% for many stock loans.
Not high at all. It will be between 3% and 6% depending on the security and the factors discussed above.
Of course not. There is no need for personal guarantees.
It is your money. Once the process is complete, funds are transferred and you can do as you please.
Two to three weeks at maximum. The stock loan process is a very simple process.
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.
In this case, the client forfeits the shares. This action does not affect the borrower’s credit worthiness. The lender lent the money against the stock, not you personally.
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.
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.
No hidden costs whatsoever. A securities loan is a very safe and transparent process.