Benefits of Stock-Based Loan
The traditional lending institutions tend to have so many terms and conditions when compared to alternative lending institutions such s stock based loan lenders. One would be surprised to know that it is possible for one to acquire a loan using his or her securities. A stock based loan tend to allow an investor to get a loan by pledging the fully paid stock as the only collateral to a third party lender. In a case where one defaults the terms and condition, one would only have to lose the stock pledged as collateral as opposed to losing any of his or her assets. One would also need to note that there has been an increase in the stock based lending believed to have been caused by the tighter criteria in the traditional lending institutions. In a case where you do not qualify to acquire a loan from a traditional credit based institution and would like to raise money, it would be essential to consider going for a stock based loan. You would also need to remember that the conventional banking sector has increased its interest rates over time making the stock based loan as an alternative and a better option for its leniency to the investor.
One as a borrower would also need to note that use of stock as collateral tends to come with its own benefits. One of the major benefits of a stock based loan is that one can raise higher capital with a given valued asset when compared to what he or she would raise in the traditional banking. One would also need to note that a stock based loan tends to come with a fixed interest rate. One would also need to note that a stock based loan tend to comes with non-recourse feature benefits. One can be sure to walk away from the loan in question at any time without much worry about the value of the stock in question. You would only need to ensure the loan proceedings and enjoy the privilege of not being subjected to any obligation.
It is also essential to note that the conventional banking will always enquire the use of the money you intend to borrow from them. One would need to note that a stock based loan does not need one to prequalify or state the reason for the use of the money to lend the amount in question. All you would need to do is make sure that you choose the stock based loan well. You would also need to be sure that the lender in question is capable of meeting both your personal and professional needs and goals.