Stock secured financing and equity lending is a relatively new concept in the global marketplace. For a number of years, stock loans and equity loans were only available to high net worth clients and corporations with accounts at large international institutions. INVX Global Partners is the first firm to introduce the stock loan product to a wider range of customers in an effort to democratize alternative financial solutions.
What are Stock Loans?
- – A stock loan gives liquidity to the borrower.
- – A stock loan provides a hedge against market volatility to the borrower.
- – A stock loan is a simple, interest-only loan vehicle.
a stock loan is a simple and effective transaction designed to provide the borrower with liquidity while retaining access to potential access to potential asset appreciation. There are different variations of the stock loan vehicles across the globe but the underlying model is primarily the same:
- The clients requests loan terms from the Lender (ideally 3 years)
- The Lender analyses are the collateral and provides a term sheet.
- The client reviews the terms and then signs the documents.
- The Lender issues a contract along with share delivery instructions.
- The client signs the contract and sends the collateral to the Lender.
- The Lender sends the loan proceeds to the client along with a closing statement and debt schedule.
- The client makes quarterly interests payments until repayment of the loan and repatriation of the securities.
In some countries, the only type of stock loan financing available is the margin loan. In other more developed regions, margin loans are private, non-recourse stock loan financing competes to provide liquidity to borrowers.
Consumers in North America are usually somewhat familiar with margin loan type financing. The typical loan-to-value for such transactions ranges from 30% – 50%, with margin calls and some type of personal or corporate recourse. Borrowers in need of additional capital can benefit from a INVX Global Partners non-recourse loan with a loan-to-value of as much as 70% and interest rates below 5%.
Consumers in Eurpoe and Asia are more accustomed to non-recourse stock loan solutions (sometimes referred to as share financing, or stock secured loans).
INVX Global Partners provides a superior stock loan solution for South America, European and Asian consumers in need of affordable and safe liquidity. Across those regions, INVX Global Partner’s loan-to-values and interest rates beat the majority of the competition every time.