About Stock Loans
Stock loans, also known as “securities-based loans”, are loans provided by banks or lending firms. They are secured or backed by shares of stock trading on any global stock exchange.
For example, if you currently own $1M of stock in a company, your lender could lend you a certain percentage of the value of the shares. Once the loan is repaid, control of the shares is returned to the borrower.
Securities-based lending is very popular because it allows you access to money without you needing to give up ownership of your shares. You can use your loan proceeds to fund a business expansion or pay down debt.
Loan amounts can vary based on a variety of factors, such as:
– Stock price
– Number of shares you own
– Trading volume
– Term length
Consistent stocks can be eligible for higher loans; while more volatile stocks could potentially be worth far less.
This method of borrowing is perfect for people who need access to extra capital, but who cannot or will not sell their shares.