What Is A Non-Recourse Stock Loan?
A non-recourse stock loan is a type of loan that uses shares in a publicly-traded company to secure the loan. It is an excellent way for individuals and business owners to tap into the value of their stock easily and quickly without having to wait too long for the money.
Stock loans can be a critical financing source for entrepreneurs. A stock loan is a resource they can quickly access to fund business operations.
The loan amount is determined by a loan to value (LTV) ratio which means the loan amount may be equal to 50% of the value of the shares needed to secure the loan.
In addition to other criteria, the maximum loan amount available to a borrower depends on:
- Market conditions
- Historical stock price and volume performance
- Total number of shared owned
- Market sector
