What stocks are eligible for stock loans?: NYSE, AMEX, NASDAQ, and many NMS, OTC BB, selected Foreign and Pink Sheeted stocks are or may be qualified for stock loans. Lenders look for steady to upward pricing and steady to strong volume. Lenders tend to shy away from volatility and lower volume stocks. (Top)
Why not just get a bank/broker or margin loan?: These types of loans traditionally come with full recourse liability, offer much lower LTV, and are subject to SEC restrictions, margin rules and calls and usually will not finance restrictive shares. (Top)
What about my credit?: Stock loans look mainly at the stock value and performance as the primary collateral of the loan. Credit may be a consideration in high dollar, high LTV loans situations. As a general rule of thumb, the stock is the primary consideration on stock loan transactions.(Top)
Are there restrictions on use of proceeds?: Proceeds may not be used to purchase securities on margin. Otherwise, the funds may be used without restriction. (Top)
What happens to my dividends?: This depends on type of loan and type of stock. Some dividends are paid directly to you as always. In other cases, the dividends could be used to pay down the loan interest and/or loan balance. (Top)
What is the interest rate?: Currently, interest on stock loans range from 3.99% to prime +3%. There are many variables used to compute the interest rate. Consult your representative for a quote on your particular loan and situation. (Top)
What are my options at end of term?: The loan my be paid off for the outstanding balance and the shares will be returned. The loan can be liquidated by the sale of the shares of stock and the upside profit up to the established cap could be realized, or a walk away option is available on many stock loans with no negative consequences to credit regardless of value. (Top)
Can I pre-pay the loan?: Yes. There are certain criteria’s that would allow the loan to be pre-paid and are outlined in the loan agreement at commencement. (Top)
Is there a pre-payment penalty?: In most cases, yes. However, those fees are generally fair and reasonable. Some of the stock loan products do not carry a pre-payment penalty. Everything is disclosed in the structuring and closing process of the loan. (Top)
What are the terms?: The length of term can range from 12 months to 5 years. Special terms and considerations can be arranged on a case by case basis. (Top)
What are the closing costs and fees?: There will be some nominal origination, funding, and holding fees based on the type of loan, amount, length and downsize exposure.(Top)
Can I use a stock certificate?: No. All stocks must be in DTC (Depository Trust Company) format. (Top)
What information do I need to provide for identity?: In compliance with Patriot Act and Homeland Security requirements, all applicants must submit a copy of their driver's license or passport as part of their application. (Top)
Can I renew a stock loan? Yes. In most cases, stock loans can be renewed or refinanced for a nominal renewal or refinance fee. (Top)
Do my shares get sold or shorted?: This depends on the type of loan that is being implemented. In some cases, (free-traded stock), the stock could be transferred, held in street name or used to collateralize other investments or securities. In any case, once the loan is paid in full, the shares are returned to the owner 1 to 1. In restricted share cases, shares are not sold, shorted or pledged. The shares remain always in the name of the owner.
Do I get regular loan statements?: In most cases yes. Depending on the program, statements are sent monthly, quarterly or semi annually. (Top)
Have more questions? We are happy to answer them. Please call a EZStockloan.com representative today! (Top)
Ready to get started? Contact your EZStockloan.com representative today! (Top)
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