What is a Stock Loan?


Question: What is a stock loan?

Answer: A stock loan is indeed a loan, and not a sale. Share holders concerned about using equities they'd much rather keep, but need cash now can tap their portfolio's value for up to 80% of the market price while still participating in some or all of the stock's rise in value. It's a win-win that puts a floor on losses, all the while retaining your right to profit from its growth. You are in and out of the market "at the same time".

Terms of repayment are flexible as well. Besides simple interest payments made quarterly at loan maturity, you can either pay off the principal and get your shares back or take advantage of non-recourse provision of your loan, forfeit your shares, and walk away with no liability without any effect on your credit rating. In addition, you can choose to extend your stock loan for a further period of time.





Stock Loan Benefits

Question: What are the benefits of a stock loan from AmeriFund Capital Finance, LLC?

Answer:







Scenarios




Stock Loans Vs. Margin Loans

Question: Is there a difference between a stock loan and a margin loan?

Answer: Absolutely. Margin loans are limited to 50% of a security's portfolio value, must have a share price of $5.00 or higher trading on a major exchange, and are subject to margin calls.

A stock loan from AmeriFund Capital Finance, LLC enjoys LTV's greater than 50% of your portfolio's price, is "no-recourse" and no calls of any kind. Should the stock value decline while the security is pledged as collateral, you have the option of simply walking away and keeping the proceeds from your loan.

Outright Sale Margin Loan Stock Loan Benefits
  • Taxable
  • Loss of upside
  • 100% current market price
  • Non-taxable
  • Margin call
  • Full recourse loan
  • 50% maximum LTV
  • Maintenance requirements
  • Non-taxable
  • No margin calls
  • LTV's from 50%-75%
  • Upsides benefits
  • Limited restrictions on use of proceeds
  • Non marginable securities qualify
  • Private transactions
  • Interest-only payments
  • Flexible terms
  • Fast turnaround times
  • No limitations on size of loan





Use Of Proceeds

Question: How can I use the loan proceeds? Are there any restrictions?

Answer: You can use the proceeds from the stock loan in almost any manner you choose, however there is one restriction. The proceeds may not be used in the purchase of marginable securities.

Our stock loan proceeds have been used in many capacities. For some it's an intelligent hedge against an uncertain market while others have used the proceeds to purchase businesses, real estate, yachts, aircraft and many other tangible assets that require capital up front. This is a successful strategy as the purchaser is able to meet the deposit or purchase requirements without having to access valuable cash reserves. It's your capital, let it work for you.

To learn more about the use of proceeds or to answer any additional questions you may have, please contact our office or click here to request a quote online