We are proud to offer
Securities Based Lending
This type of lending allows the borrower to use their investments (stocks, mutual funds, bonds or other securities) to obtain funds for personal or business use. Using investments as collateral it is possible to borrow money at low interest rate financing for up to 10 years.
Benefits
- Fixed interest rates between 2.5% and 4.5%
- Interest Only quarterly loan payments
- Loan terms of 3, 5, 7, or 10 years
- No closing costs, Banker or transaction fees
- No income or credit criteria
- Funds may be used for any purpose including real estate purchase, business expansion, etc*
- Non-Recourse Loan. The loan is only collateralized by the pledged securities - not real estate or other personal property
- Loans available for up to 80% of the securities’ value
- The borrower keeps all dividends and upside market appreciation of the securities
How It Works
- Loan-to-value ratio and the interest rate are driven by what securities are pledged. The more liquid and actively traded securities the higher the loan-to-value ratio and lower the interest rate.
- No principal amortization or loan prepayment.
- At the end of the loan term the loan may be renewed, refinanced, or paid off.
- At pay off, the exact number of shares or collateral initially pledged is returned to the borrower.
- Default trigger set at 80% of the loan amount not 80% of the securities’ value like typical margin loans. For example: securities value of $1MM, loan of $800k, default trigger at $640k (80% of the loan amount). If the securities value fell below $640k the borrower could walk away from the obligation of repayment of the loan and securities and keep the original loan proceeds ($800k) or contribute cash or securities to bring value back to $640k.
Criteria
- The stock must be free-trading without any restrictions and the borrower cannot own more than 10% or more in the company of the issuer.
- Retirement funds (401k's, pensions, etc), do not qualify for this program.
Simple Steps
Complete the Simple Quote Form listing the number and name of securities and symbol. We will quickly determine the amount of the loan and the interest rate and prepare a loan proposal for you. If you agree to the terms the next step will be for you to provide proof of ownership of your stocks, bonds or options. We will then verify the values and funds can be deposited into your account in three to five business days once the contract is signed and the transfer takes place. Upon repayment of the loan at the agreed upon terms the same amount of stock or other pledged collateral will be returned to you. It's that simple!
* Proceeds of the loan may not be used to acquire publicly traded equity securities.
