A stock loan is where a borrower obtains a loan from a lender by using the stocks they own as collateral for the loan. Some other names for stock loans are securities-based lending, securities loan and leveraged equity loans.
The entire process is quick, transparent and confidential. Loan proceeds can be used for personal or business purposes, to leverage, diversify or hedge current market positions with no restrictions.
We provide several financing models including repurchases agreements (repos), reverse repos and collateralised stock loans whereby ownership of the securities remains with the borrower. Securities-backed loans provide several benefits. They can offer the borrower substantially lower interest rates and reduced risk relative to alternatives like a margin loan. Additionally, they offer greater flexibility in repayment and provide a cure period to meet demands for additional collateral.
Loan terms are based on evaluation of the risk and future performance associated with the securities held as collateral. Loans are interest only and non-recourse, the borrower has the option of simply walking away at anytime with no further liability. In the event of a loan default there is no reporting to credit reference agencies or governmental departments and no public notice. There is no adverse consequence to the borrowers credit rating.
Funding can be dynamic with loans closing in as little as 8 business days. Global custodians are used where collateral is segregated and borrower has online access to pledged securities. We work with a pool of lenders and we fund against publicly traded securities traded on most world public exchanges. The minimum loan size is 1 Million US with a maximum loan size of 250 Million.