Securities Based Loans are an excellent source of funds for someone who holds publically traded stocks.
Securities-based lending is generally involves a revolving line of credit that uses your eligible investment portfolio as collateral.
This funding option permits you to access funds without immediately liquidating your portfolio.
This gives you the ability to access liquidity while maintaining your portfolio’s current exposure to the market.
You will continue to receive the benefit of any dividends, interest or capital appreciation that may accrue in the account.
Some of the other main benefits of securities financing include:
- Interest rates range from 2.5% to 4.5%, fixed, interest only payments
- Loan periods up to 10 years
- Loans are NON-recourse, and not recorded
- Borrower retains full beneficial interest (dividends, appreciation, etc.)
- Funds may be used for virtually any purpose, anywhere in the world
- Borrower’s nationality and residence can be anywhere in the world
This is a non-recourse, non-recorded loan and the lender cannot come after you personally nor report you to the credit bureaus in case of non-payment.
If you default, you get to keep the money, and the lender gets to keep the stock as the sole remedy.
At the end of the loan period, the borrower will receive back from the lender the same number of shares originally pledged as collateral, which automatically includes any appreciation as well.
This is a great option for many business owners, especially foreign nationals, borrowers with limited or undocumented income, and there is no credit check so you qualify even with challenged credit.
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