What are Stock Loans? And How Do They Work in Switzerland?
Stock loans are a popular form of lending, especially for those that work internationally. This type of lending is also known as securities-based lending. Lenders offer loans of different amounts to those looking to borrow. That lender then requests that the borrower’s stock be used to secure the loan l. With the SIX, the process would involve Swiss stock.
Switzerland has a vibrant and stable market. Because of this, people who qualify can access and get approved for stock loans. For those looking for these loans in Switzerland, getting started isn’t difficult — you just need the help of a reliable lender.
Some people are hesitant to use stock loans because they don’t fully understand them. However, they offer a wide range of benefits. Some people use the money they receive from Swiss stock loans to finance a new business project. This process enables them to invest in themselves and their ideas while expanding their income.
Others may use these loans to cover other expenses and debts that need to be addressed. Here are some of the most noticeable benefits of using Swiss stock loans and how they compare to traditional loans:
- No personal guarantee
- No credit check
No personal guarantee: Some types of loans put you in risky financial situations. Because many traditional loans require personal property as collateral, you have more to lose if you’re unable to pay back your loan. If you receive a stock loan for a stock listed on the SIX, the stock is the only property needed to secure your loan.
Flexibility: When it comes to these loans, many users prefer the flexible interest rates that they offer. Because there are more flexible rates available with stock loans, you’re more likely to find a loan that fits your current financial needs. With many traditional loans, you’re likely to get higher interest rates.
No credit check: One of the hardest parts of acquiring a traditional loan is the credit check. Lenders focus intensely on credit history. But with stock loans, a credit check isn’t required. Because you don’t have to pass a credit check, stock loans are a potential option for those with less than ideal credit.
Liquidity: This term means that equity can be turned into usable cash fairly quickly. Stock loans offer fast liquidity, which makes them a popular choice for those that need to access their money sooner rather than later.
It is important to remember that the convenience of stock loans depends on the market itself. If a market isn’t doing well, it may be more difficult to secure this type of lending. The state of the market will also determine the loan amounts you’re likely to receive. Things like trading volumes, price, and number of shares will all impact your access to these loans.
If you aren’t sure how to navigate the stock loan market and explore your options for stock loans, we can help you do so. We are constantly evaluating the market and how it’s changing — get in touch with us today to learn how we can help!
How Do Stock Loans Work?
Also known as securities lending, these loans are available to help investors keep the stock they own while still having access to the cash they need in order to make other investments. Our borrowers gain the opportunity to dip into the value of their non-marginable stock quickly and easily without having to wait a long time for the money.
Our loan amounts are dependent on characteristics of the collateralized security, including the number of shares, price, volatility, and additional criteria. By transferring your stock to us, you can be assured of receiving a loan against its value. All you have to do is make quarterly interest payments during the life of the loan. We keep the process simple: once you fully repay the borrowed amount, your stock will be transferred back to you.