STOCK LOAN PROCESS

. 1) Borrower requests a term sheet (TS) (aka 'loan commitment' or 'loan approval') for a stock loan by providing:

......(a) Stock company/symbol (i.e. ticker or #)?

......(b) Country/exchange traded?

......(c) Loan amount AND # shares available to pledge?

......(d) Shareholder name AND address for term sheet?

......(e) Name of current custodian of shares AND holding bank/broker-dealer?

......(f) Are the shares held in personal name, corporate, or SPV?

......(g) Transfer of title or not?

......(h) Use of the loan proceeds?

2) If Lender determines loan is viable, Lender provides borrower with a TS for review. TS includes: maximum loan amount allowed, loan-to-value (LTV), interest rate, loan term, payment details, etc.

 3) If TS is acceptable to Borrower, borrower returns:

      (a) signed TS,

      (b) if shareholder is an individual, passport of the shareholder,

      OR if shareholder is an entity, passport of the CEO, etc, and the certification of

      formation document.

 4) Lender prepares Loan Agreement (aka Control/Security Agreement) for borrower review.
 5) Agreement is finalized and borrower signs contract electronically.

 6) Shares to secure the loan:

     (a) borrower retains ownership of the stock during the term of the loan UNLESS capital controls of stock country are problematic for lender,

      (b) lender directs borrower to open bank/broker dealer account; shares are electronically transferred to new account (or via SWIFT MT542).

 7) Loan agreement is submitted to the bank/broker dealer to govern the account.
 8) Lender sends loan proceeds to borrower's bank/broker account.

Desktop Site