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Stock Secured Loan

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(845) 479-5714

Strategic Engineering

Stock Secured Loan

A Stock Secured Loan is a loan collateralized by shares (“Collateral Shares”) of a publicly traded company stock, which can be a useful tool for short or long term borrowing needs of an individual or publicly listed Companies. Shares can be traded on many major markets such as: Hong Kong, Singapore, Malaysia, Thailand, Philippines, South Africa, Turkey, France, Italy, etc.
  • Stock loans are a simple and effective financial instrument that allows the Borrower to maintain a position in the market (no need to sell stock), while creating liquidity to meet an immediate monetary goal
  • Because of the non-recourse nature of our loans, clients are able to use this product not only as a low risk source of liquidity, but it can also be used as a hedging tool to protect gains in the value of the equities being offered as collateral.
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Stock Secured Loan

Key Highlights

  • Non-recourse (i.e., no additional personal assets needs to be pledged as security/borrower’s risk is limited to the collateral shares)
  • Loan amounts can range from under $1M USD to over $100M+ USD per tranche
  • No margin calls
  • No Short Selling
  • Even micro-cap/small-cap shares acceptable as collateral
  • LTVs typically ranging from 40% to 65%
  • Loan terms can range from 24 to 60 months
  • Fixed annual interest rates typically below market rates (3.5% to 7% per annum)
  • Ability to retain upside market appreciation
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Our platform brings together specialists in investing, operations, lending, legal strategy, and technology to deliver comprehensive financial solutions.

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Process

Anticipated Process Timeline

01

Step

Borrower completes our "Quick App" form providing a stock symbol, number of shares to pledge and target loan amount. Lender determines the viability of the loan, and calculates a loan-to-value ratio (LTV) , duration and the interest rate, based on an assessment of both short and long term risks. Lender issues a term sheet to borrower. Terms are negotiated & finalized. Borrower signs term sheet, completes questionnaire, and sends copy of passport and brokerage statement to lender.

02

Step

Lender receives Term Sheet and sends contract to borrower for review. Contract is signed.

03

Step

Borrower opens escrow account with escrow agent (attorney). Borrower transfers shares to escrow agent's escrow account (at custodial brokerage firm) Once lender has been notified collateral has been delivered, the loan is funded according to the loan agreement.