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A Guide to Stock Based Loans

There have been a lot of questions from people regarding stock based loans. They think that because the program is so simple, there is something fishy behind it. The reason for this mindset is that in the financial services industry, most everything is complicated. However, this is not true with stock based loans. It is what it is at its face value. Stock based loans is a secured kind of loan with liquid assets as collateral (stocks), The pledged assets protect the lender and will be seized if the borrower is not able to pay the loan. Period. So actually, there is nothing  fishy abut this loan such as from StockLoan Solutions. It is a straightforward, simple loan, using stocks as collateral.

There are credit cards with limits and there are credit cards that have no credit limits. Using your credit card is a non secure way of getting money to use. If the credit card holder does not pay the credit card company, then it can only negatively affect their credit. Credit card companies do not usually pursue litigation if the creditor card holder does not pay because of legal costs involved   Most credit card holders don't pay because they don't have money to pay which credit card companies know. In stock based loans, the lenders don't litigate either since they have a collateral in the pledged stocks that will be spelled out in the loan contract. This simplicity is one of the major benefits of the stock based loans.

If you have high quality securities as collateral, then you get the best loan terms.

Major investment banks don't lend as high as money lenders are able. This is because money lender have private money. Major investment banks use conservative industry guidelines as to which securities are lendable and which ones are not But, private money lenders have the flexibility to determine on a case to case basis, how much money they are willing to lend on any given security. Most of the large investment banks don't have the flexibility that private lenders have in most situations. Find out more info here.

In the market place, there is a need for simple but aggressive stock based lending. If you want to gain your client's trust, advise them to try doing small loans at first. Then allow then to see the process involved. Make them be comfortable with everything. When they have gotten through the process, a solid foundation will be set to build upon for future, larger loans.

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