Building liquidity for your business
Do you own publicly traded stock and are looking for some liquidity for your company? Did you try applying for a tradition bank loan and were declined? Then stock loans funding might be just the solution you are looking for.
A non-resource or a stock loan is a loan based on the collateral of the stock provided by the borrower. These transactions allow a business owner to obtain financing depending on the value of their securities and other factors such as the holdings’ volatility. By having the option to access a majority of the current value of their securities while still being able to retain access to them, the business owner is able to find the liquidity it needs in his own company.
With this type of loan, the borrower is immune to any unexpected down-turns in their share price. Due to the fact that he is liable only for the value of the collateral stock, the borrower is not trapped if the value of the stock happens to decline below the loan. This alone makes this loan option very attractive in today’s securities lending environment.
The Benefits of Stock Loan Financing:
- Creates liquidity to the business from the equity
- Is a straight-forward, interest-only loan solution
- Offers the possibility of profit from future stock appreciation
- Provides a hedge against market volatility to the borrower