THE STOCK LOAN PROCESS
STOCK LOAN STEP 1
You complete the loan quote application by providing the stock’s ticker symbol, stock exchange, desired loan amount and number of stock shares to be pledged.
STOCK LOAN STEP 2
quotes for you to review. You decide on the best quote and request a written offer for the loan, called the Stock Loan Term Sheet.
STOCK LOAN STEP 3
Before a written offer outlining terms of the loan can be received, you must provide a “Stock Loan Fee Agreement” and submit a copy of a brokerage statement verifying that you in fact own the securities to be used as collateral. A critical part of the process is to verify ownership.
STOCK LOAN STEP 4
A written Stock Loan Term Sheet is issued and you can either accept or negotiate the terms of the loan. Once the Stock Loan Term Sheet is accepted, the lender will send the Loan Agreement to you or your legal representative. A custodian bank/transfer agent will be selected by the lender which is designated to hold the shares at during your loan term. A custodian bank/transfer agent is a prominent licensed and regulated brokerage institution.
STOCK LOAN STEP 5
Once the Loan Agreement is executed, the lender and borrower place the securities with an agreed upon custodian (local bank/transfer agent of borrower’s residency). The custodian will likely be in the country where the security is traded but can be in any location the borrower prefers. The securities must be in electronic format, paper securities are not eligible.
STOCK LOAN STEP 6
An agreement between the borrower, lender, and the custodian bank is prepared and executed by all three parties. A closing statement will be generated and you will deposit the stock with the custodian bank/transfer agent. The lender will then wire the funds to the bank account you have provided to the lender and the stock custodian/transfer agent.
STOCK LOAN STEP 7
You are done, use your loan proceeds for any purpose !