Stock Loans
Publicly traded companies in many geographies will qualify for attractive loan financing using free trade company stock. The advantage to the company is that valuable, tangible collateral such as receivables, equipment, real estate, and inventory can remain available for the company to utilize for other purposes. In addition, the company is not creating dilution by having to issue additional shares at a price that does not fully reflect the value of the firm.
These structures are fast and very efficient for the borrowing entity. Transactions can close in as little as one to two weeks, presuming all information is readily available and the company is responsive to lender requests. Typical minimum borrowing amounts would be $250,000, although smaller tranches may be considered. Loan term lengths will vary depending on client needs.
To qualify for stock loans, companies will need to provide the following:
- Proof of public listing
- Current regulatory filings (in most circumstances)
- Legitimate repayment strategy
- Demonstrated ability to service the debt
- Suitable use of proceeds
- Proper supporting documentation
Companies with a minimum daily trading volume of $100,000 and above will represent the most attractive candidates for this program. The focus for the funders will be Canadian, European, and Asian based firms trading on exchanges in those geographies. Companies trading on significant exchanges Latin America and the Caribbean will also be of interest.
