Lately, I have received some exciting feedback from lots of people seeking to get a Stock Loan . 1 of the recurring objections that keeps coming to light from prospective shoppers is that the system is so very simple. In other words, “What’s the catch?”
These of you familiar with the financial solutions market recognize that several items are not so straightforward. Stocks, bonds, ETFs, ADRs, solutions, collars, interest rates, etc. Having said that, this program is what it is at its face value. This is a secured loan with liquid assets as collateral. The lender is protected and can seize the pledged assets if the borrower defaults on the loan, nothing at all far more. So what’s the catch? I guess that is it.
Folks have credit cards with limits, of $5,000, $ten,000, $50,000 and a lot of AMEX card holders have no credit limit. Credit cards are a NON secured way of having dollars to use. If the borrower defaults, the credit card firms can only negatively affect their credit. Quite couple of credit card businesses will pursue litigation to get their money back if the borrower doesn’t pay for the reason that of the legal fees involved. Most credit card holders that default never pay because they never have the cash to spend and the credit card businesses know that. So why litigate when in most cases that work will be frivolous? Our lenders won’t litigate either. They will seek recourse with regard to the pledged portfolio and that will be spelled out in the loan contract. This simplicity is 1 of the important rewards of the PAL system.
We advise that all brokers as well as possible customers go to the FAQ’s section of our website and evaluation the page meticulously. Most of the “behind the scenes” (if you want to get in touch with it that) language is there, how the interest price and LTV is determined, etc. The bottom line is that greater high quality securities get the ideal loan terms. Possibly that’s the catch?
Why doesn’t a important investment bank lend to as high an LTV as our lenders are capable? The answer is private cash. Most of the important investment banks use conservative sector regular recommendations as to which securities are marginable (lendable if you will) and which ones are not. Our private revenue lenders have the flexibility to figure out on a case by case basis how substantially funds they are prepared to lend on any offered safety, no matter if those securities are thought of “marginable” by key investment banks or not. Most of the larger investment banks do not have the flexibility our private lenders have in most circumstances.
This is a niche product. There is a void out there in the marketplace place for uncomplicated but however aggressive securities primarily based lending. In order to obtain your client’s trust, advise them to walk ahead of they run. In other words, attempt carrying out small loans at first. Our minimum loan quantity is $100,000. Enable your clientele to see the method involved. Permit them to grow to be comfy with almost everything. Once they’ve gone through the process, we are certain that a solid foundation will be set to construct upon for future, bigger loans.
Guntis Lambergs has over 30 years of productive international business knowledge. He is a Managing Partner of Globe Portfolio Loans, an international firm that is a division of Mortgage Captain, LLC, a mortgage brokerage company established in 2004, with offices in Massachusetts and Florida. World Portfolio Loans offers their “PALs” program internationally.