1. Max 90% LTV (Loan to Value)
2. Term: 2 to 5 years， Max 7 years.
3. Interest: U.S. Prime +1, simple , paid quarterly. Payments may be deferred until loan maturity. In general is 3%~8%.
4. Non- Callable (If the shares go down in price we do not ask for more stock or money from borrower)
5. Non-Recourse (We do not claim any other assets in the case of default)
6. No upside Cap (The borrower keeps all the increases in stock price, paid at loan maturity)
7. Prepayment allowed with no penalty
There are a lot of advantages our loan has over the bank loan:
1. Our loans are non-Callable. This means if the price goes down we do not make a margin call.
2. Our loans are non-recourse. This means that the only security for the loan is the stock. We have no rights to the borrowers other assets.
3. The borrower may choose to not repay the loan in which case it becomes a sell.
4. Interest payments can be deferred until loan maturity. In other words we can arrange it that there are no payments during the term.
5. We can accept most publicly traded stocks including small cap stocks.
6. If the borrower does not repay the loan, it is not considered a default and it has no impact on his credit
7. Our loan is based on the stock not the person. Anyone can apply for our loans.
8. We can make loans on stocks traded on any major exchange in the world.
9. The loan proceeds can be used for any purpose
10. The stock is 100% hedged against price decline.
Steps:
1) Stock Name and symbol
2) Number of shares to be used for loan
3) Possible use of loan proceeds
4) We then speak with your client on a conference call with you to make sure everyone can agree
5) We issue a Term Sheet
6) If client accepts the Term Sheet we send within 24 hours the Master Loan Agreement
7) When the client has signed the Master Loan Agreement, our Senior Executives sign it.
Stocks are transferred per instructions.
