Cashless Options:

The Action - When employee options vest, the need to pay for the option up front is non-existent.  A shareholder’s only prospect of converting would stem from a sale at current market price, with all option costs covered by the sale. 

The Effect - The downside to this long standing procedure is the shareholder must sell today to take advantage of this aspect of their compensation package.  This action leaves the employee with no benefit of price appreciation, which most option converters are working for in the first place.

 

The Solution - Have AmeriFund Capital Finance pay for the option conversion up front, allowing the shareholder to then pledge the newly converted stock for a loan.  Once the loan is funded, AmeriFund Capital Finance will subtract the cash outlay from the proceeds and the borrower will now have the right to benefit from the long term interest in that asset. 

Traditional Options:

The Action - When employee options vest, those shareholders are required to pay for the cost of the option out-of-pocket.  A shareholder’s only prospect of paying themselves back for the conversion would stem from a sale at current market price.

The Effect - The downside to this long standing procedure is the shareholder must sell today to replenish the cash laid out, all the while trying to take advantage of this aspect of their compensation package.  Once again, this action leaves the employee with no benefit of price appreciation, which most option converters are working for in the first place.

The Solution - Have AmeriFund Capital Finance pay for the option conversion up front, allowing the shareholder to then pledge the newly converted stock for a loan.  Once the loan is funded, AmeriFund Capital Finance will subtract the cash outlay from the proceeds and the borrower will now have the right to benefit from the long term interest in that asset.