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Stock Loans FAQs, Asset Based Loan, Securities Loan (Page 1 of 3)
F.A.Q. Stock Loans and Asset Based Loans
What is a Stock Loan?
Non-Recourse Stock Loans by definition is a loan against the value of a stock or portfolio of stocks whereby the shareholder (OWNER) can borrow up to 80% of the stock value (in some cases higher) of the portfolios market value “without selling the shares”. Like a home equity loan for stocks but much better. You borrow against the appraised value of the portfolio and pay a below prime interest rate for the term of the loan. And then at term end you either pay off the loan and receive your stock back with any stock appreciation, refinance the loan, or if the stock price has fallen below the LTV amount, forfeit the shares without paying back the loan (non-recourse) with no liability or effect on your credit rating.
What stocks are eligible for a Stock Loan?
Any publicly traded security are eligible. Stocks, bonds, mutual funds, ETF’s (exchange-traded fund), ADR’s (American Depositary Receipt), Penny Stocks (stocks on the pink sheets or bulletin board stock), Foreign Stocks and Bonds are ALL eligible. Typically, we look for a minimum $50,000 daily trading volume for each publicly traded stock.
Am I personally liable for this loan?” or “Can the company come after me on this loan if I do not make payments?
NO, this is a “non-recourse” loan; the lender cannot come after you personally. There is NO personal liability associated with the stock loan. The only security for the loan is the stock and the only recourse the lender has is against the stock. You have NO personal liability exposure.
Is the loan reported to the credit bureaus or reporting services?
NO, the Securities loan is not reported to the credit bureaus and there is NO public record of this loan. Even if you elect to walk away from the loan and default because, for example, you have more money then the stock is worth, it is NOT reported.
Are non-U.S. securities allowed to be used as collateral in stock loan transactions?
Yes. Some non-U.S. securities are allowed to be put up as collateral. Some of the other countries include Canada, UK, European countries, Japan, Israel, Australia, India, and Korea, to name just a few.
What are the Loan to Value (LTV) percentages for the loans?
The LTVÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢s vary depending on the quality of the securities being collateralized. With high quality large cap stocks you can expect LTVs up to 80% (sometimes higher) while with small cap or pink sheet (penny stocks) securities the LTVÃÆââââ¬Å¡Ã¬Ã¢ââ¬Å¾Ã¢s will be more conservative and lower. This means it can be as high as 80% LTV but can be Lower. It depends upon the quality and type of security owned. Each loan is evaluated on a case-by-case basis. The highest LTVs are offered to high quality securities such as Blue Chip stocks.
How are the stocks evaluated?
Stability, trading volume and share price are factors in determining the interest rate, term and Loan to Value. Good stocks, like good investments, always get the best terms. Typically, we look for a minimum $50,000 daily trading volume for each publicly traded stock. The most attractive interest rates and terms and conditions are available to those stocks with good strong and steady volume and price, and low volatility. Prices over $5/share typically get best prices as long as volatility is low and volume is strong and steady. Strong and steady volume is highly prized as it allows some predictability. The leading indicators when determining the eligibility of a stock as collateral are going to be exchange, volatility, share price, liquidity, trends, filings, short term trading volume and long term trading volume.
How to get best school grants for quality education
Educational costs are increasing day by day. And it is becoming hard for an average person to get quality education. But for students who are interested in getting quality education like technical, mechanics, electronics or some other higher education it is easy to get it through school grants.
School grants are bit different from loans. Best part of getting education this way is that it does not require you to pay back the money you have taken for getting the education. If you are looking for jump starting your professional career and find it hard to fund education, grants is a way by which you can get your dreams come true.
In general school grants enables you to get quality education without worrying about paying back the money. These schools allow needy but talented students to get education and make their dreams come true. There are number of federal as well as private colleges and institutions that allow grant education. But as federal grants only are not enough to fund the education for all the aspiring students, it is advisable that you should look for some private institutions as well.
Various associations, institutions and organizations are available that are willing to provide the necessary help for bright students. Most of the people think that it is difficult to find these institutions but with the help of internet and search engines you can easily look for them online. As there is tough competition between the aspiring students, getting a private school grant may be a tough job. But if you are well planned and try early you can get it all the way.
First of all you should find some of the best institutions and colleges that provide you grant education. Fill out all the necessary forms and submit the application as early as possible. You have to demonstrate your financial need at the time of application, so be ready for it and prepare all your papers and documentation well in advance. Not only your financial need, but you have to also demonstrate that you are a bright student for the college by providing your unique academic records.
It is also essential that you follow all the guidelines and instructions while applying. You should also look for the limitations of the courses or programs that some of these colleges or school grants may have. This all will surely help you get best education by the best institution to enlighten your career.