Stock Loans As The Preferred Liquidity Solution
Apart from stock loans, investors generally have two options when they need liquidity:
Euro Credit's stock loan program offers the intelligent investor a third option. That investor can hold the majority or all of his or her assets in high-yield equity securities. When the need for liquidity arises, the investor can then use those securities as collateral for a loan without forfeiting any price growth and other value increases in those securities. During the term of the loan, the collateral securities are held in a custodial account and the investor can use the loan cash principal balance for any purpose, including further diversiﬁcation and growth of the investor's portfolio.
Unlike traditional bank loans and credit facilities, Euro Credit's stock loans have no effect on a borrower's creditworthiness. Our loans are all non-recourse. In the event that a borrower elects not to repay the principal balance of a stock loan, our only recourse is to assume full ownership of the collateral securities. We do not require personal guarantees and we will not pursue a borrower's assets other than the collateral securities in the event of non-payment or some other default.
As recent market events have demonstrated, investors that have signiﬁcant holdings in particular equity securities can create an adverse effect on the market price of those securities when they seek to liquidate large blocks of stock. When those equity securities are used to collateralize a loan rather than being sold to create liquidity, the stock loan will not have the same direct adverse effect on the stock price.
Euro Credit has also structured its program to source and originate loans that are collateralized with securities on most major international exchanges and public trading platforms, regardless of whether those securities meet standard margin requirements, including, without limitation, stock that regularly trades at per-share prices below US$5.00 per share, stocks from issues that have recently gone public, and OTC or “pink sheet” securities.
Unlike direct sales of securities, stock loans may also create tax-advantaged returns with limited capital gains effects. Prospective borrowers should understand, however, that Euro Credit is not a licensed financial or investment advisor and does not provide legal or tax advice. Further, Euro Credit disclaims all liability or obligations for the same. Borrowers should consult with their legal and tax advisors regarding their legal and tax ﬁling obligations in their respective jurisdictions regarding stock loans.
Innovative liquidity Solutions
Wealth managers and investment advisors generally counsel their clients to maintain a portion of their portfolios in assets that can be quickly converted to cash as the need for liquidity arises. Assets with that liquidity proﬁle, however, provide low or no returns, leaving the investor with underperforming assets in his or her portfolio.
Euro Credit's innovative stock loan program is the perfect solution that enables investors to hold higher-performance assets in a portfolio with a simultaneous ability to realize cash liquidity as quickly as the need for cash arises. With our program, an investor can use any equity securities that are traded on a public exchange, including blue-chip corporate stock, non-marginable securities, and other equity-linked tradable products as collateral for a low-interest non-recourse cash loan. In response to our program and in a very short amount of time, investors have come to recognize Euro Credit as the premier lender in the international stock loan industry.
Euro Credit built its stock loan program on the highest principles of professionalism and responsiveness. When you come to Euro Credit for a solution to your cash liquidity needs, you will always receive:
Euro Credit understands that liquidity demands can arise with little or no notice and that investors often need to tap cash liquidity on short notice. Accordingly, we have developed our stock loan program to fund loans in most cases within fourteen days after a loan applicant submits a completed application to our loan underwriters.
Basic Stock Loan Parameters
Euro Credit does not solicit prospective borrowers directly to secure a stock loan through our innovative liquidity solutions. Further, we have formulated our stock loan program such that we will source and fund loans only to the extent that those loans fall within the following minimum parameters: