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How to Use A Securities Loan to Fund Your Commercial Transaction

How to Use A Securities Loan to Fund Your Commercial Transaction

A Securities Loan (not a margin loan) allows investors to borrow against their securities portfolio to create liquidity while staying in the market and enjoying the benefits of dual appreciable assets at once. Margin loans have been around forever but they are expensive and risky and they are usually maxed out at 50% of the portfolio value. On top of that, they can be called at any time. Why not explore borrowing up to 80% of your portfolio without all the risk?

If you need money to complete your development project or acquire a distressed asset for pennies on the dollar and you own securities (stocks, bonds, mutual funds and other securities) you or your client should consider a securities loan. They aren’t what they used to be.

Distressed assets are trading for pennies on the dollar and if you have the experience to manage and stabilize them why not borrow against your securities to acquire them? Most people borrow against the home they live in and they borrow against their business property and against the car they drive, so why not borrow against your securities especially since the terms are so good?

Benefits Of a Securities Loan: – 80% Loan to value of your portfolio-Interest rates between 4.0% and 6.0% – Fixed Interest Only – No credit or FICO requirements – In fact, you should not be asked for your credit score at all – No minimum income requirements – Interest-only loan payments – No upfront, application or due diligence fees – Funds may be used for any purpose, personal or business use, including real estate purchase, business expansion, etc. – No personal guarantee (a non-recourse loan). The loan is collateralized by the pledged securities only and not by real estate and not by other personal property. There are no residency or citizenship requirements and foreign nationals do qualify for this loan. Stocks held in some foreign stock exchanges qualify and we can close in a matter of days.

Minimum loan size is $500,000 with no maximum loan amount. The terms are typically 3, 5, 7, or 10 years and the borrower keeps all dividends and upside market appreciation of the securities. Securities Backed Lending may be the funding solution you’ve been looking for! Remember, this type of non recourse lending allows the borrower to use their investments to obtain funds for personal or business use. Using your investments as collateral you are able to borrow money with low interest rate financing.

 

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