How Stock Loans Work

Stock Loan 101

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Diversify and Protect Your Wealth with a Stock Loan

Large single stock portfolios can arise when individuals own/run publicly listed businesses where much of their wealth is tied up in their stock ownership.

 

Borrowers can use a non-recourse single stock loan to secure a loan against their shareholding and create liquidity by releasing cash without selling their shareholding. This is a preferred option for many shareholders who are unable to sell their shareholding outright.

 

A non-recourse loan means that any loan is only secured against the loan collateral. In the event of a default no other assets of the borrower are at risk.

 

Non-recourse stock loans provide a quick financing solution with only regular interest payments.

There are no hidden charges.

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Frequently Asked Questions

What Is A Non-Recourse Stock Loan?

A non-recourse stock loan is a type of loan that uses shares in a publicly-traded company to secure the loan. It is an excellent way for individuals and business owners to tap into the value of their stock easily and quickly without having to wait too long for the money. 

Stock loans can be a critical financing source for entrepreneurs. A stock loan is a resource they can quickly access to fund business operations. 

The loan amount is determined by a loan to value (LTV) ratio which means the loan amount may be equal to 50% of the value of the shares needed to secure the loan.

In addition to other criteria, the maximum loan amount available to a borrower  depends on: 

- Market conditions

- Historical stock price and volume performance

- Total number of shared owned

- Market sector

Why Would Someone Want A Stock Loan?

The ability to convert a majority of the current market value of securities into cash without selling them outright is an attractive option for many shareholders. With that value unlocked from their shares, individuals and business owners can get the liquidity they need with ease and without visiting the bank.

 
What Are The Benefits of A Stock Loan?

Liquidity – Stock loans are a fantastic option when an individual or business owner needs a quick financing option. It turns equity into cash with ease.

Interest-only – No ambiguous or hidden charges; stock loans are an interest-only, transparent loan option. There are no never-ending charges that seem to extend the credit unnecessarily.

Accessible – Stock loans are available to almost anyone. You don’t need a credit check to access one for your individual or business needs. The process is painless and straightforward, and your money is delivered to you most conveniently.

Privacy – It provides borrowers with a trustworthy source of capital. All transactions are private and kept in strict confidence.

Competitive – Stock loans offer you competitive and flexible interest rates. You typically receive better terms than you would get from a traditional marginal loan.

What Can You Use Single Stock Loans for?

Just like other types of securities-backed lending, single stock loans can be used for several reasons. Borrowers can use them to create liquidity, buy assets, or purchase a property. Single stock loans can also be used to reinvest to seek new investment opportunities and potentially higher returns than the original shareholding. 

 

Increasingly, single stock loans are also a popular mechanism that allows owners of a very condensed portfolio to diversify investments and revenue streams. Often, individuals or families will use stock loans to expand their portfolio away from a single source of wealth to mitigate risk. At the same time, they can also benefit from exposure to different markets and financial instruments in the hope of generating better yields.

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“Great team, highly professional and with fantastic connections to get the best deal. A pleasure to work with.”

Alexander
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“I thought getting a stock loan was going to be much more difficult before meeting the team at Stock Release Limited. They showed me exactly what I needed to do, and we were able to close much quicker than I expected.”

Stacey
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“I have always been impressed by their professionalism, knowledge and proactive approach. Highly recommended.”

Roger
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“I have used this firm 2 times for different services, and each time they continue to surprise me with the network they have in the market. The team were extremely helpful and was able to secure me a great deal. Helped with all things from the initial stage all the way through to the completion.”

Christian
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