New York City

STOCK LOAN PROCESS

  1) Borrower requests a quote for a stock loan by providing:

      (a) stock company name, symbol/#,

      (b) country/exchange, and

      (c) loan amount (or quantity of shares available for collateral).

  2) If lender determines that the loan is viable, lender provides borrower with a quote that details:

      maximum loan amount allowed, loan-to-value (LTV), interest rate, loan term, and tranche details.

  3) If quote is acceptable to borrower, borrower provides:

      (a) copy of broker account statement confirming the shares,

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

      (c) if shareholder is an entity, passport of the CEO, etc, and the certification of formation document.

  4) Lender creates a TS (term sheet) also know as a 'loan commitment/approval' for review by borrower.
  5) Terms are finalized, and borrower signs and returns the TS to the lender.

      Upon receipt of a signed term sheet and the 2-3 items from #3 above,

      loan can close within  5-7 trading days.
  6) Lender prepares the contract (i.e. security agreement) for borrower review.
  7) Contract is finalized and borrower signs contract electronically or with the local custodial bank.
  8) New stock account is opened in borrower's* name at a local stock brokerage designated by lender.

  9) Shares to secure the loan are transferred (usually electronically) to the new account.
10) Security agreement is submitted to the stock broker to govern the new account.
11) Lender wire transfers the loan proceeds to borrower's bank account (worldwide).


* In a few countries, due to government monetary restrictions, share ownership needs to convey to lender during the term of the loan. This detail will be provided with the initial quote, and TS.