Tag Archives: high
Commercial Finance- Hard Money (Page 1 of 3)
Commercial Finance- Hard Money explores the little known world of financing real estate and business accounts receivable with respect to situations that banks and other financial institutions typically avoid. The year 2008 will be known for difficult financial times for large institutions, businesses and individuals. Financing will be harder than ever to obtain.
The Merriam- Webster Online Dictionary defines hard as:
“1 a: not easily penetrated: not easily yielding to pressure b of cheese: not capable of being spread: very firm
2 a: of liquor (1): having a harsh or acid taste (2): strongly alcoholic b: characterized by the presence of salts (as of calcium or magnesium) that prevents lathering with soap
3 a: of or relating to radiation of relatively high penetrating power: having high energy b: having or producing relatively great photographic contrast
4 a: metallic as distinct from paper b: of currency: convertible into gold: stable in value c: usable as currency d: of currency: readily acceptable in international trade e: being high and firm
5 a: firmly and closely twisted b: having a smooth close napless finish
6 a: physically fit b: resistant to stress or disease c: free of weakness or defects
7 a (1): firm definite (2): not speculative or conjectural: factual (3): important or informative rather than sensational or entertaining b: close searching c: free from sentimentality or illusion: realistic d: lacking in responsiveness: obdurate unfeeling
8 a (1): difficult to bear or endure (2): oppressive inequitable b (1): lacking consideration, compassion, or gentleness : callous (2): incorrigible tough c (1): harsh, severe, or offensive in tendency or effect (2): resentful (3): strict unrelenting d: inclement e (1): intense in force, manner, or degree (2): demanding the exertion of energy : calling for stamina and endurance (3): performing or carrying on with great energy, intensity, or persistence f: most unyielding or thoroughgoing 9 a: characterized by sharp or harsh outline, rigid execution, and stiff drawing b: sharply defined: stark c: lacking in shading, delicacy, or resonance d: sounding as in arcing and geese respectively used of c and g e: suggestive of toughness or insensitivity
10 a (1): difficult to accomplish or resolve: troublesome (2): difficult to comprehend or explain b: having difficulty in doing something c: difficult to magnetize or demagnetize
11: being at once addictive and gravely detrimental to health
12: resistant to biodegradation
13: being, schooled in, or using the methods of the natural sciences and especially of the physical sciences
14: of money: contributed (as by individuals or political action committees) directly to a particular candidate or campaign
Synonyms: hard difficult arduous mean demanding great exertion or effort. Hard implies the opposite of all that is easy . Difficult implies the presence of obstacles to be surmounted or puzzles to be resolved and suggests the need of skill, patience, or courage . Arduous stresses the need of laborious and persevering exertion .”
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.