In the last decade, it’s always been the case that lending on a single line stock has cost more than a typical mortgage or portfolio loan. This is due to low central bank rates and SWAP rates.
Single line stock lending is generally provided by firms that offer a fixed rate in the region of 3 – 5% per annum, this is not as closely linked to external factors such as market SWAPS and there for presents an attractive option when market rates increase.
The cost makes for a favourable alternative to bridging finance which can cost circa 1% per month or a mortgage which can take more time to arrange due to tighter regulation and the due diligence involved.
The arrangement fees will generally be in the region of 2 – 3% which can be deducted from the loan advance.
What Can I Use A Single Stock Securities Loan For?
The answer is for any legal purpose you require. Many people use this facility to invest in other assets and diversify away from a single stock position. Where mortgages require the funds to be used for an approved purpose, such as home improvements, securities lending is not restrictive. It may be that you wish to purchase a property as a cash buyer or invest in another company. There is no restriction on how these funds can be used.
Are you eligible for a single line stock loan?
The shares will need to be in a publicly listed exchange and have a minimum trading volume of $100,000 per day and a market cap of circa $50,000,000 and a Minimum loans are for $250,000 and cannot amount to more than 5% of the total company value.
More on Lending On A Single Line Stock
- How To Create Liquidity From Vested Stock Or Large Single Share Investments? Lending on a diversified portfolio is an option available via many banks. They favour the reduced risk and are delighted to take on the assets as security. Read More…
- Benefits of a single stock loan This lending is a non recourse loan meaning you can walk away from the loan if the share price falls significantly and you feel that the value may not recover. Read More…
The Guide to Securities Backed Lending
Securities-backed lending provides ready access to capital. From Property Development Finance and Bridging Finance to standard mortgages, you can use securities-backed lending (also known as Lombard loans) for various purposes.
Securities-backed lending can be an exceptionally useful tool for creating liquidity quickly. As well as more “traditional” Lombard loans against a diverse portfolio of liquid, listed securities, Advias can also broker more unusual deals.
These loans are typically used to access liquidity quickly, allowing investors to take advantage of time-sensitive opportunities or diversify their positions.
Advias has a proven track record of acting in clients’ best interests and negotiating the best outcome.