• No Doc Stock Loans and Lines of Credit from $250,000 to No Maximum
• Lower Loan Amounts Considered on a Case by Case Basis
  
• No Transfer of Title Required and No Prepayment Penalty on Our Five Star Stock Loan
• Low Rates from 1.25%
• Non-Recourse Loans Available for Penny Stocks (Pink Sheets)

You will need to own securities with a current market value of no less than $300,000, which will be reflected on the account statement that you send to us with your initial application. (Exceptions can be made on a case-by-case basis for smaller portfolios).

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FREQUENTLY ASKED QUESTIONS

1. What are the advantages of your securities-based line of credit?

We offer institutional security in an SIPC-insured account; a custom lending structure with many more features than what is available at any other U.S. banking or brokerage institution; a structure where shares remain in your own account and title; a line of credit that puts control of repayment in your hands; lowest interest in the industry, starting at 3% for a variable rate line; and the highest advance rate in the industry. instant cash for any investment or other cash need - with interest-only terms, and no terminal point as long as you maintain your securities collateral; and

You can get a direct institutional securities-based line of credit from some institutions. However, normally the advance rate (loan amount) is at or around 50% for stock equities while we offer up to 90% with all of the same security, reporting, and access that you've come to expect from a major financial institution because your securities credit line is managed by one of three major financial institutions with which we work to implement this financing. That means low-interest, lots of flexibility, but much more cash available to you, when you need it. In fact, many of our clients obtain their securities-based line of credit even when there's no immediate need, just to be able to have the cash ready without interrupting their long-range investment objectives in the slightest, since their stocks keep working for them as always and are not sold (thus no incurring capital gains taxes as may be the case with other kinds of securities financing).

2.  Please tell me about institutional stock loans and securities lending vs private placement transfer-of-title stock loans and securities lending.

When you give up title to your stocks, you are giving up legal ownership of your assets in every way except through the lender's contract (what is sometimes called "beneficial ownership.)" This means that the status of your relationship to your asset, in effect, boils down to the contract alone.

The health of one's lending institution is always important, but when the contract is the core of your relationship to your assets, then the financial health and stability of the lender becomes particularly critical. The likelihood of your receiving your shares back upon repayment is governed entirely by the abilities of the private placement lender, rather than the rules or regulations or guarantees provided through agencies such the SIPC. As a private loan transaction, these are issues that need to be considered.

Extra assurance steps should always be undertaken with Transfer of Title style loans.
A client should make an effort to obtain the assurances they need as evidence of the private lender's financial health. We suggest third-party professionally audited and/or verified financials, updated regularly, so you can ascertain lender's ability to return your shares when your loan is repaid.

We recommend the following minimum yardstick: Liquidity equal to no less than ten times the amount needed to repurchase every share needed on the open market for every share of every outstanding loan under lender's management. Further, this should be projected over the outer limit of worst-case pricing scenarios over no less than six months, if not longer. The resulting data should be verified by a fully licensed CPA or attorney in good standing and in writing. Ensure that you or your client has the right to speak to or otherwise verified the CPA/attorney to verify further beforehand.

Unfortunately, few if any Transfer-of-Title lenders will provide this level of asset-to-liability verification, much less to update it regularly. Even though such due diligence is common and acceptable in virtually any other financial venue -- and increasingly demanded by regulators in the wake of the recent mortgage crisis -- many borrowers continue to turn over title to their shares without any evidence to support their lender's financial health. The transfer-of-title lender is in such cases is in effect asking you to "trust" them when they refuse to provide verifiable proof of their ability to service their loan portfolio.

In a typical transfer-of-title loan some or all of the shares are sold to create the cash to fund the loan. The borrower will have given the lender the right to do so by way of the loan contract. Often times the lender's right to do so is buried within the loan contract that the borrower must sign to proceed, and some clients do not realize that their shares will be sold outright to raise at last part of the funds that constitute the loan.

If your transfer-of-title lender fully discloses that they may sell all or part of the portfolio in the process of funding your loan, and they do so clearly (not in small fine print) and third-party, professionally verified and updated financial information is available in writing, the loan may have the minimal level of security needed to proceed.

Note: The U.S. Internal Revenue Service may treat your Transfer of Title loan as a sale at inception for tax purposes (consult with your licensed tax professional to confirm actual status). Never accept statements from any broker "guaranteeing" any aspect of your loan without verification, such as no taxability.

Institutionally managed securities-based loan, by contrast (such as those offered through our company) are structured on the same principles as any common brokerage or banking loan, that is, with a simple lien on the asset until the loan is repaid. Shares do not change title except if the collateral is surrendered in the event of an uncured default. Unlike transfer-of-title loans, there is no "beneficial ownership", only actual, outright ownership that remains with the borrower. Rather than a private placement loan operating in a relatively unregulated space, your loans are underwritten by a fully regulated U.S. institution with the personal attention of licensed advisors.

There are conventional institutional loans - what we normally refer to as margin loans - and there are structured loan programs. For Securities Finance, our structured program is built as an enhanced loan facility made possible through a private equity depository relationship which enables financing with far better features than those typically available through banks or brokerages. This means higher loan-to-value, low rates, more customized structures, and a far broader range of eligible securities.

With our institutional program the shares are not sold to fund the loan in any manner. Instead, funding is direct and in cash via a simple deposit to borrower's account. That is not the case with transfer-of-title loans, where some degree of share selling is required to fund the loans, and a client may be told they will receive their loan funds over several weeks as a portion of the shares are sold into the market gradually.

The issue of due diligence with our loans has been in effect "pre-completed" for you by state and federal. regulatory authorities since the loans are managed, underwritten, guided, counseled, and administered in full by a top-tier, fully regulated, SIPC-member institution. That translates into royal treatment from a brokerage/banking firm that has had to meet all required government standards for asset security and licensure, standards perhaps now than at any point in history. Your final loan contract is between you and your licensed advisor; your records and reporting and access are provided with the same professionalism you are used to with your existing brokerage or bank.

Disclosure is never an issue with institutional securities loans. These issues are governed by state and federal law, whereas private placement lenders operate in a relatively unregulated space even today.

That also means the same client rights and lender accountability that any client of any U.S. bank or brokerage has under the law. It means public, open, easily available facts on your lending institution; no obligations of any kind until and unless you arrange a loan contract that you yourself choose to sign; and loan funds deposited directly into your account with no complicated transfer issues or delays.

Transfer of Title to a private third party or retention of your shares in a top-tier brokerage in your own account and title? Private placement loan in an unregulated environment, or institutional loan in a secure, fully licensed space? The choice will of course be entirely yours to make but we counsel caution and good due diligence regardless of choice.

3.  But I need to pass credit checks and supply a long personal financial statement and other paperwork, to obtain one of your loans, correct?

No. Actually, quite the opposite is true. These are "No Doc" loans -- that is, your income and your assets do not determine either the careerist of your loan offer or whether you will receive the loan at all. If you have eligible securities, a custom loan term sheet will be offered (often with great flexibility as well). Other than a "soft credit check" - a check to make sure you aren't currently in bankruptcy proceedings -- your loan is almost certain to be approved.

4.  Will we need a large portfolio of securities to participate in this loan program? Do I need multiple securities in my portfolio?

No. Portfolio's as small as $300,000 are eligible for these loan facilities. The main consideration, particularly for smaller securities portfolios, is that the stocks, bonds, mutual funds, etc. in the portfolio are of sufficient price and trading volume - what you might call - "quality" - to achieve loan eligibility for underwriting purposes. Most marketable securities with a reasonable track record will qualify under this standard for at least one quote. Diverse portfolios of multiple quality securities will naturally get the best quotes. For more on loan eligibility, please see our stock loan / securities loan criteria page. (Keep in mind too that this loan facility will also accept "securities-like" assets, such as Christies and Lloyds-appraised professional certified artwork.)

5.  Are we held only to the loan quote(s) provided on their Term Sheet?

No. Your term sheet represents only your initial line of credit securities loan offer, your minimum offer as it were and is designed to be at the least a good yardstick by which to estimate your final loan terms. You can avail of that offer, or request modifications in discussions with your registered account advisor after we've received your signed term sheet. Our goal is to get you to the place where you can establish the exact securities financing you desire, either what we have provided on the term sheet or a variant arranged through your account advisor prior to final loan documents.

The progression, incidentally, is quite simple. One of our staff will speak with you directly when you first inquire, and you will produce evidence of your securities in the form of a copy of your account statement. Once we have the information, we will analyze your collateral in underwriting and we will then deliver your term sheet.

Your next step will be to sign your no-obligation term sheet to signify your understanding of the basic line-of-credit terms as offered, then either accept those terms or finalize your terms further directly with your institutional advisor who will address your questions, priorities, and objectives and to the extent possible, make adjustments if necessary and allowable. The credit line loan documents are then signed, a temporary lien is placed on your securities in your account, and the funds are made available for withdrawal via wire, checking account, or VISA/ATM.

6.  At what point do I begin to incur an obligation?

There is no obligation until you sign your credit line loan documents. There is no obligation to apply for a quote or to obtain a term sheet beforehand. Even after you have signed your term sheet and set up your account, you are under no obligation to proceed with your loan if you choose not to. In fact, even after signing - if you choose not to withdraw your cash, you will not be charged interest. Again, once the term sheet has been signed you will be taken directly into the correct desk at your lending institution with a representative assigned to assist you and process your loan. Your advisor will help you transfer your collateral into your own new brokerage account in New York.

To repeat, until you sign your loan documents, you continue to have no obligations of any kind. You simply have a brokerage account at a top-tier, major U.S. institution, with standard SIPC-insured member protections and the 24/7 online access that American investors are accustomed to. The decision to proceed with your institutional securities financing will always, and in every way, be entirely your own, as with any other actions on your account or assets.

If the loan terms we've provided are acceptable to you, or you've customized the terms with your advisor to suit your requirements more precisely, your loan documents will be assembled and delivered to you via your institution very quickly, though you will have as much time as you need for review. Your obligation only begins with the signing of your loan documents. The entire process is seamless and easy in most cases.

Since this question deals with obligations, remember that you can exit your loan at any time by simply paying off the remaining loan balance (for our floating rate credit lines - most are - there is no prepayment penalty; there may be, however, a prepayment penalty for fixed rate quotes if this is what you require). Payoff of any outstanding drawdown amount (your loan principal) can be direct with cash, or by asking the lender to permit selling of enough shares to cover the balance. Other exit and rollover options are also available upon consultation with your advisor.

After retirement of the debt, as with any asset-secured loan, the lien placed on your shares in your account is immediately lifted and you will have full freedom thereafter to trade, sell, or transfer the shares any way you choose.

7.  Are there any Capital Gains taxes?

No, there are no capital gains taxes with our custom line of credit program. These programs leverage securities in your own account that are not sold to fund the loan in any manner, in a credit-line type financing structure. As a result, regardless of the value of your securities, provided that you've complied with the terms of your loan contract there can be no capital gains taxes while you work with your loan funds for other investments.

Notwithstanding, we recommend that you always use the services of a licensed tax professional for any tax-related matter or issue no matter what it may be.

8.  Do you have an Affiliate program?

Yes, our Affiliate program is a conventional broker-advisor type program.  This program is open only to individuals who:

(1) have a background in finance, securities, real estate,or a relevant field with a clean legal background dating back no less then four years; and

(2) preferably a live, actual transaction and

3) a verifiable, pre-existing sales channel or appropriate pre-existing network of potential clients for our securities finance services. Our ideal affiliate is an independent financial advisor who works with a large number of high net-worth clients.

Please note that we cannot accept for affiliation individuals seeking to develop brand new markets, sales channels, or networks for our securities loan services when none currently exist. Networks, outlets, or conduits must be pre-existing. We strongly encourage established independent/registered investment advisors and other related professionals to apply.  Please click here to learn more about our Affiliate Program.

We will often place those who do not have live transactions (qualified clients ready to apply for one of our loans) into the Affiliate Status Pending category until they have an actual client to present to us, at which time their affiliation application will be reviewed and the affiliate admitted, provided they meet criteria 1 and 2 above. Note that a lead tracking system (banners, etc) will be made available at no charge for admitted affiliates on request.

Only those who are actual signed affiliates may market our loan products (beyond the approved internet banner program noted above). We do allow our approved one-page Introduction to be distributed direct from us to your client, however, regardless of affiliation status, and we will be happy to call and discuss our programs with your clients.

Conventional full-agent affiliates may also participate and use the internet-banner type affiliation program.

9.  Can you give me the names of the institutional lending institutions before I sign my term sheet?10

Unfortunately, no by agreement with our lenders. This is an enhanced loan facility made possible by special relationships we have carefully cultivated with fully regulated U.S. financial institutions through our partner firms. We are not employees of the institutions, and the loan services we offer are not available at these institutions in this form or with these features except through our loan facility. So certain protocols must be observed in marketing the lending facility to the general public, and that is why we screen our applicants with care. Though most of our clients will be eligible for our services, we are required to operate in this manner.

However, you will receive full disclosure of not only the name of your lending institution but all be taken right into a conference call and invited to meet with your licensed account representative as soon as we have your Term Sheet in hand.

Keep in mind there are no up-front fees, no application fees, and no obligation at any time prior to signing your loan documents, so there is no risk in waiting for institutional disclosure until after you have applied in this way. We can assure you, however, that your lender will be one of the biggest and best in the financial industry.

Note please that this policy is also an administrative measure to ensure that our lenders are not overwhelmed with ineligible or (or unfortunately, even fraudulent) loan requests. We are expected to do our utmost to ensure that this credit line program is administered in a professional manner, and we take that commitment seriously.

10.  Can't I get these loans on my own, for example, by walking over to my broker or bank and asking for the same terms or structures?

No, you cannot. These are custom structured financing facilities carefully designed to make use of support across more than one institution to create a level of flexibility and value that exceed the institution's own private banking or private placement services. As custom, not standard services they are unique in that these features are not often present in the same package.

Put another way, we provide an accessible loan facility for individuals that is superior to that which you can obtain on your own at any financial institution in the country, and a plug-and-play lending facility that is for the most part impractical if not impossible for professional institutions to create on their own.

11.  What if I want to swap out my current collateral with other eligible securities, even though I don't want to formally exit the loan yet?

This is possible with this securities-based line-of-credit facility. One of the many flexible features of these loan programs is that with lender's permission you can swap out the current set of collateral securities for a replacement set of approximately equal quality and value, allowing the potential to unfreeze and regain your original shares mid-loan if you should need them for other purposes. Your lending institution is happy to work with you should this scenario arise.

12. Are any other types of collateral acceptable for your program?

Virtually any marketable security is eligible for consideration, from municipal bonds to T-bills, to U.K. stocks to mutual funds.(Please see the above Loan Criteria section for details). As of of March 1, 2010 this institutional loan facility can now be used with verified and certified works of art provided they have been officially certified and valuated by Christies. Please contact us for more information on the collateralization of artwork.

13. How soon can I expect to see my loan funds?

Within 48 hours of signed credit line documents is standard. We measure receipt of loan funds by gauging the time from which the loan documents are signed. If the collateral and your new account have been set up (same day may be possible in some cases) and you have read and approved the terms of your loan offer, you will sign the loan documents in as few as 24 hours. From that point until funding - typically the wiring of most or all of the credit line - is 48 hours for processing.

14.  Suppose I have an immediate problem or question. Who do I contact?

One of our staff will always be available to speak with you for any issues prior to the signing of your term sheet. We are also available 24/7 to support you as needed post-loan, as you will our direct number and your account manager's direct number.

Once you have signed your term sheet and have moved on to your institutional lender, you will speak and work with your licensed account advisor at the brokerage that will write and manage your loan, who will be your main point of contact for matters related to the day-to-day servicing of your financing.

15.  Do I get regular account statements?

Yes, always. Like any bank or brokerage, you get regular monthly or in some cases quarterly account statements direct from your institution. You can also print these out via your online access, which is available 24 hours a day, 7 days a week. The traditional statements will show the status of your loan and the position of your collateral securities among other data in your reports.