metroBanc™ Capital Advisors

Why would I want or need a stock loan?
Why not a margin loan?
What are the LTV's?
What are the interest rates?
Is the interest rate fixed?
What kind of securities can I borrow against?
What is the eligibility criteria for the stock?
Can I borrow against more than one stock?
Can I borrow using options?
Is there a minimum or maximum amount I can borrow?
Will anyone be notified of the loan?
Is my personal credit checked?
Will ownership of the stock be transferred to the lender?
How long does the loan take to close?
Are there restrictions on the proceeds?
What about my voting rights and dividends?
Can I prepay the loan early? Is there a fee?

Why would I want or need a stock loan?
A shareholder of a large block of restricted stock has very few options that will provide him with immediate liquidity or hedge should it be desired. His hands are virtually tied and he can only sell to market 1% of the outstanding share amount every 90 days. Unfortunately this practice tends to be noticed by other officers and shareholders which can drive the price down, and now he is facing a substantial tax liability as well.

There is a better way. metroBanc™ Capital Advisors is proud to be the first to offer holders of restricted securities, the True Loan™ Stock Loan. The True Loan™ is a fully SEC, IRS, FRB and UCC compliant loan transaction, that is 100% private with no filings, interest rates as low as 5%, and unlimited loan size. Because it is a loan and not a sale, there is also no tax consequence. Shares will be held in the borrowers name, and the proceeds have unlimited use and could be used to recapitalize an existing business, purchase real estate, or make that once in a lifetime purchase. To learn more about a restricted stock loan, please click here.

Why not a margin loan?
A margin loan has terms that are poor in comparison to a true restricted stock loan. Start with the fact that margin loans are capped at 50% LTV with FULL recourse in the event of a default. To learn more about stock loans vs. margin loans, click here.

What are the LTV's?
Typically the LTV's on restricted shares will fall between 35-80%, with the highest LTV's going to stocks with higher price, larger market cap, higher daily volume, and longer trading history. A higher LTV is not always in the best interest of the borrower and a prudent lender will attach a sensible LTV based on the security pledged.

What are the interest rates?
Interest rates can be as low as 5%, up to 10% or higher depending on the strength or potential weakness of the deal. A lower interest rate is not always in the best interest of the borrower and a prudent lender will attach a sensible interest rate based on the security pledged.

Is the interest rate fixed?
Yes. All of our lending products carry fixed rates, with quarterly payments.

What kind of securities can I borrow against?
We will accept most shares trading on the NYSE, NASDAQ, and NYSE Alternext (AMEX). Currently, we are not accepting OTC's or foreign exchanges.

What is the eligibility criteria for the stock?
We will look at every restricted stock on a case by case basis, however you can learn more about the basic eligibility requirements by clicking here

Can I borrow against more than one stock?
Yes. We will look at a portfolio of securities.

Can I borrow using options?
Yes. We will arrange up front funding in order to convert the options into shares, and fund the difference to the borrower at closing of the stock loan. To learn more about stock loans using options, please click here.

Is there a minimum or maximum amount I can borrow?
$250K minimum, and there is no maximum.

Will anyone be notified of the loan?
No, the loan is completely private. The only individuals that may be made aware of the transaction will be at the borrowers discretion such as counsel, accounting professionals, etc. To learn more about this and other unique stock loan benefits, please click here.

Is my personal credit checked?
No. There are no credit checks, referrals, background checks, asset or lien checks, etc. We require only limited information in order to originate a stock loan.

Will ownership of the stock be transferred to the lender?
Absolutely not. The shares will be required to stay in the borrowers name, in the borrowers account, and can even remain in cert form. The lender will have zero access to the shares.

How long does the loan take to close?
A True Loan™ stock loan takes longer to fund than a typical free trading stock loan, due to a more rigorous compliance process. Typically, the loan can fund in as little as 30 days from inception.

Are there restrictions on the proceeds?
Only that the proceeds can not be used to purchase marginable securities. To learn more about the use of proceeds from a stock loan, please click here.

What about my voting rights and dividends?
Since there was never any transfer of ownership, all voting rights and dividendswill be retained by the borrower.

Can I prepay the loan early? Is there a fee?
Yes. The True Loan™ does provide the borrower with a pre-pay option, with a sliding scale fee attached.

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.