Stock Loan
Stock Loan Basics:
A securities-based loan, or commonly referred to as a stock loan, is one the least expensive financing options available. The low rate loan is obtained through the pledging of stock, bond, or investment portfolio as collateral. A line of credit can also be established using these securities. The loan is non-recourse so the lender can only recover the collateral or the pledged securities. Clients retain ownership of the securities and benefit of the investment portfolio such as capital appreciation,
dividends, and interest income.
Stock Loan Terms:
The terms for a stock loan generally flexible and can be customized. Depending on the securities in the portfolio, a client can obtain up to 90% loan-to-value. The loan is can be either a variable or fixed rate. A variable rate loan is indefinite while fixed loan is often for a period of time. It can be revolving line of credit and an advanced term loan. US STOCKLOAN primarily deals with variable rate securities- based loan. The variable rate is often based on a percentage spread plus an index such as LIBOR or FED Funds. The interest on the loan is also tax friendly. A stock loan can be purpose (buy, carry or trade securities) or non-purpose (NOT buy, carry or trade securities).
Multiple Uses of a Stock Loan:
A stock loan has many purposes but is used mainly for financing and liquidity needs and is available to individuals, businesses, corporations, institutions, or charities. The loan is simple to set-up, convenient to access and has few requirements. Because securities back the loan, the interest rate on a stock loan is more attractive than typical loan. Whether buying real estate or consolidate debt, a stock loan is an attractive financing solution. A stock loan is ideal for meeting liquidity needs, which are often overlooked or misunderstood. A few examples of liquidity needs are deferring taxes from selling of low cost basis stock, diversifying a concentrated stock position or having immediate cash needs.
Our Advantage
US STOCKLOAN has a high caliber team that assists clients in obtaining the most competitive offers through our proprietary access to a network of top security-based lenders.
moreUse of Stock Loan
- Real estate purchase, renovation, or investment
- Portfolio diversification
- Refinancing, debt consolidation
- Education/ college payments
- Business needs: cash management, debt restructuring, portfolio management