metroBanc™ Capital Advisors - Stock Loan 101 - Stock Loans vs. Margin Loans

There are numerous benefits that place a true stock loan at the forefront of choices when trying to leverage one securities without selling outright. Below is a comparison table which will outline the differences.

But first lets remember the benefits (or lack thereof) of an outright sale.

Immediate loss of ownership
Lost opportunity costs
Fully disclosable transaction
Immediate tax liabilities
If an officer, mandatory SEC reporting
If an officer, probable shareholder knowledge of the trade.

Ok, so selling really isn't an option. But what about a margin loan? Isn't margin the en vogue method of choice when seeking immediate liquidity and leverage?

It used to be, but sophisticated investors and shareholders are moving from the margin environment to a hedged stock loan from a handful of private banking groups who offer much more attractive terms. Consider the following:

Traditional Margin Loan	Bona Fide Stock Loan
LTV set at 50% max Margin or maintenance calls Higher interest rates FULL recourse loan SEC and NASD regulated Strict share requirements	LTV's up to 85% No margin calls ever Lower interest rates NON recourse loan Non regulated private transaction Few share requirements Interest only payments No reporting to shareholders or SEC 100% private transaction Loans against almost any stock Retain dividends and voting rights Funds in as little as 3 days

Stock Loan 101 - What is a Stock Loan?

Stock Loan 101 - The Loan Process

Stock Loan 101 - Loan Benefits

Stock Loan 101 - Stock Loans vs. Margin Loans

Stock Loan 101 - Using Options

Stock Loan 101 - Use of Proceeds

Stock Loan 101 - Loan Scenarios

For more information about a stock loan, please contact our office.
For an online quote request, please use the short form on the right side of this page.