|
More Information |
You should understand the fundamental
characteristics of traditional securities-based loans which ensure the
financial viability of the funding process for both the borrower and the
lender. Based on our experiences over time and our success in returning
collateral to the borrower, most stock loans have:
A loan-to-value ratio (LTV) of under 80 percent;
A term of 36 months or longer; and
A favorable interest rate with regular quarterly interest-only payments.
The more informed you are about the lending process, the greater likelihood that we can successfully create a tailored solution to fit your funding needs.
What To Avoid When
Choosing a Securities-Based Loan
High LTV
Avoid unrealistically high loan-to-value ratios. In our experience, the
closer the LTV approaches 100 percent of the total asset value, the less
likely it is that the lender will be capable of hedging the position and
generating sufficient capital in order to return the securities at the
end of the loan term.
Full recourse loans
Additional liability, fees, and penalties may be assessed.
Short loan term
Be cautious of loan terms that are less than three years, especially
when the LTV is higher than 75 percent. That’s because there is
insufficient time for the lender to leverage pledged collateral
conservatively in a financially profitable and sound manner for all
concerned.
High interest rate
Certain lenders may offer a loan with no interest payments during the
life of the loan. However, the interest is usually compounded and set at
a higher rate and then becomes due in full upon loan termination. In
this case, the “true” cost of funds may be hidden (either intentionally
or unintentionally) from the borrower until the loan term ends and the
borrower discovers that he or she owes significantly more than the
actual loan value.
Poor documentation and communication
You should get detailed documentation and timely notification of
interest payments due. A legitimate lender will also notify you promptly
if your loan goes into default because of a significant decrease in
collateral value. However, it should notify you how to “cure” your
default and keep the loan current and viable.
What cannot be used as collateral:
*Can be converted to cash then securities may be purchased and used as collateral.
privacy
policy l
disclaimer
copyright 2010
Touchpoint Communications
|
More Information |
You should understand the fundamental
characteristics of traditional securities-based loans which ensure the
financial viability of the funding process for both the borrower and the
lender. Based on our experiences over time and our success in returning
collateral to the borrower, most stock loans have:
A loan-to-value ratio (LTV) of under 80 percent;
A term of 36 months or longer; and
A favorable interest rate with regular quarterly interest-only payments.
The more informed you are about the lending process, the greater likelihood that we can successfully create a tailored solution to fit your funding needs.
What To Avoid When
Choosing a Securities-Based Loan
High LTV
Avoid unrealistically high loan-to-value ratios. In our experience, the
closer the LTV approaches 100 percent of the total asset value, the less
likely it is that the lender will be capable of hedging the position and
generating sufficient capital in order to return the securities at the end
of the loan term.
Full recourse loans
Additional liability, fees, and penalties may be assessed.
Short loan term
Be cautious of loan terms that are less than three years, especially when
the LTV is higher than 75 percent. That’s because there is insufficient time
for the lender to leverage pledged collateral conservatively in a
financially profitable and sound manner for all concerned.
High interest rate
Certain lenders may offer a loan with no interest payments during the life
of the loan. However, the interest is usually compounded and set at a higher
rate and then becomes due in full upon loan termination. In this case, the
“true” cost of funds may be hidden (either intentionally or unintentionally)
from the borrower until the loan term ends and the borrower discovers that
he or she owes significantly more than the actual loan value.
Poor documentation and communication
You should get detailed documentation and timely notification of interest
payments due. A legitimate lender will also notify you promptly if your loan
goes into default because of a significant decrease in collateral value.
However, it should notify you how to “cure” your default and keep the loan
current and viable.
What cannot be used as collateral:
*Can be converted to cash then securities may be purchased and used as collateral.
More
FAQ's
Guidelines
Sample
Loan
If you have any questions about what qualifies please contact us.
privacy policy
l
disclaimer
copyright 2010
securities based lending
|
More Information |
You should understand the fundamental
characteristics of traditional securities-based loans which ensure the
financial viability of the funding process for both the borrower and the
lender. Based on our experiences over time and our success in returning
collateral to the borrower, most stock loans have:
A loan-to-value ratio (LTV) of under 80 percent;
A term of 36 months or longer; and
A favorable interest rate with regular quarterly interest-only payments.
The more informed you are about the lending process, the greater likelihood that we can successfully create a tailored solution to fit your funding needs.
What To Avoid When
Choosing a Securities-Based Loan
High LTV
Avoid unrealistically high loan-to-value ratios. In our experience, the
closer the LTV approaches 100 percent of the total asset value, the less
likely it is that the lender will be capable of hedging the position and
generating sufficient capital in order to return the securities at the end
of the loan term.
Full recourse loans
Additional liability, fees, and penalties may be assessed.
Short loan term
Be cautious of loan terms that are less than three years, especially when
the LTV is higher than 75 percent. That’s because there is insufficient time
for the lender to leverage pledged collateral conservatively in a
financially profitable and sound manner for all concerned.
High interest rate
Certain lenders may offer a loan with no interest payments during the life
of the loan. However, the interest is usually compounded and set at a higher
rate and then becomes due in full upon loan termination. In this case, the
“true” cost of funds may be hidden (either intentionally or unintentionally)
from the borrower until the loan term ends and the borrower discovers that
he or she owes significantly more than the actual loan value.
Poor documentation and communication
You should get detailed documentation and timely notification of interest
payments due. A legitimate lender will also notify you promptly if your loan
goes into default because of a significant decrease in collateral value.
However, it should notify you how to “cure” your default and keep the loan
current and viable.
What cannot be used as collateral:
*Can be converted to cash then securities may be purchased and used as collateral.
More
FAQ's
Guidelines
Sample
Loan
If you have any questions about what qualifies please contact us.
privacy policy
l
disclaimer
copyright 2010
securities based lending
|
More Information |
You should understand the fundamental
characteristics of traditional securities-based loans which ensure the
financial viability of the funding process for both the borrower and the
lender. Based on our experiences over time and our success in returning
collateral to the borrower, most stock loans have:
A loan-to-value ratio (LTV) of under 80 percent;
A term of 36 months or longer; and
A favorable interest rate with regular quarterly interest-only payments.
The more informed you are about the lending process, the greater likelihood that we can successfully create a tailored solution to fit your funding needs.
What To Avoid When
Choosing a Securities-Based Loan
High LTV
Avoid unrealistically high loan-to-value ratios. In our experience, the
closer the LTV approaches 100 percent of the total asset value, the less
likely it is that the lender will be capable of hedging the position and
generating sufficient capital in order to return the securities at the end
of the loan term.
Full recourse loans
Additional liability, fees, and penalties may be assessed.
Short loan term
Be cautious of loan terms that are less than three years, especially when
the LTV is higher than 75 percent. That’s because there is insufficient time
for the lender to leverage pledged collateral conservatively in a
financially profitable and sound manner for all concerned.
High interest rate
Certain lenders may offer a loan with no interest payments during the life
of the loan. However, the interest is usually compounded and set at a higher
rate and then becomes due in full upon loan termination. In this case, the
“true” cost of funds may be hidden (either intentionally or unintentionally)
from the borrower until the loan term ends and the borrower discovers that
he or she owes significantly more than the actual loan value.
Poor documentation and communication
You should get detailed documentation and timely notification of interest
payments due. A legitimate lender will also notify you promptly if your loan
goes into default because of a significant decrease in collateral value.
However, it should notify you how to “cure” your default and keep the loan
current and viable.
What cannot be used as collateral:
*Can be converted to cash then securities may be purchased and used as collateral.
More
FAQ's
Guidelines
Sample
Loan
If you have any questions about what qualifies please contact us.
privacy policy
l
disclaimer
copyright 2010
securities based lending
|
More Information |
You should understand the fundamental
characteristics of traditional securities-based loans which ensure the
financial viability of the funding process for both the borrower and the
lender. Based on our experiences over time and our success in returning
collateral to the borrower, most stock loans have:
A loan-to-value ratio (LTV) of under 80 percent;
A term of 36 months or longer; and
A favorable interest rate with regular quarterly interest-only payments.
The more informed you are about the lending process, the greater likelihood that we can successfully create a tailored solution to fit your funding needs.
What To Avoid When
Choosing a Securities-Based Loan
High LTV
Avoid unrealistically high loan-to-value ratios. In our experience, the
closer the LTV approaches 100 percent of the total asset value, the less
likely it is that the lender will be capable of hedging the position and
generating sufficient capital in order to return the securities at the end
of the loan term.
Full recourse loans
Additional liability, fees, and penalties may be assessed.
Short loan term
Be cautious of loan terms that are less than three years, especially when
the LTV is higher than 75 percent. That’s because there is insufficient time
for the lender to leverage pledged collateral conservatively in a
financially profitable and sound manner for all concerned.
High interest rate
Certain lenders may offer a loan with no interest payments during the life
of the loan. However, the interest is usually compounded and set at a higher
rate and then becomes due in full upon loan termination. In this case, the
“true” cost of funds may be hidden (either intentionally or unintentionally)
from the borrower until the loan term ends and the borrower discovers that
he or she owes significantly more than the actual loan value.
Poor documentation and communication
You should get detailed documentation and timely notification of interest
payments due. A legitimate lender will also notify you promptly if your loan
goes into default because of a significant decrease in collateral value.
However, it should notify you how to “cure” your default and keep the loan
current and viable.
What cannot be used as collateral:
*Can be converted to cash then securities may be purchased and used as collateral.
More
FAQ's
Guidelines
Sample
Loan
If you have any questions about what qualifies please contact us.
privacy policy
l
disclaimer
copyright 2010
securities based lending