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  • Posted on March 29, 2018 at 3:03 pm

What You Need to Know Concerning Non-Recourse Stock Loans.

Usually, when borrowers obtain funding from financial institutions such as banks, they are often required to provide a collateral. Mostly, borrowers pledge homes or vehicles as common assets to get funding. You can, however, use your stock as security for a loan. At StockLoan Solutions, you pledge your stock to easily get funding. Usually, the loan amount you get will be based on share price, number of shares and shares volatility among other factors.

Normally, the borrower pledge stock as collateral to receive funding. With non recourse stock loans, you only lose the stock you pledge as collateral in case you are not able to repay the loan. Therefore, if you want to raise some capital, StockLoan Solutions will provide the amount you want for your project.

When non recourse stock loans come to an end, a borrower has certain options. First, the borrower may extend the loan. Extending the loan will only happen when the lender accepts the borrower to do so for another fixed period. However, if the lender does not want the borrower to extend the loan, the borrower receives his or her stock back. However, the borrower has to repay the loan in full to get the stock back.

The borrower may, however, choose to cash in the stock profits when the value of stock increases. This will, however, happen if the value of the stock used as collateral have increased and is higher than the total loan due together with the interest. When such a situation occurs the borrower has the option of cashing in the profit.

For non recourse stock loans, the borrower can decide to walk away in case the stock value goes down. Usually, you will get a loss on the pledged stock when the value falls below the due loan amount. In case of a loss and the borrower walks away, the lender takes such stock. After the borrower walks away, there is no another way for a borrower to recover the money.

Why take a stock loan.

The borrower enjoys several benefits by getting StockLoan Solutions loan and pledging stock as collateral. One of the benefits is flexibility that comes with taking a stock loan. Because you can use the stock loan proceeds in different ways, they offer flexibility. There is no restriction on the way you use the proceeds of stock loan like in the case of a mortgage. Another benefit of stock loans is that they are fast. Usually, a borrower gets the loan faster within several days. To get a stock loan at Stockloan Solution, you are required to transfer the stock as well as agree on loan terms.

Basically, when you own stock and want to get funding, non recourse stock loans at StockLoan Solutions provides a good option to get financing.

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