Security Backed Loans

Security Backed Loans

Overview of Security Backed Loan

A Security-Backed Loan (“SBL”) is a loan collateralized by shares (“Collateral Shares”) of a publicly traded company stock, which can be a useful tool for short or long term borrowing needs.
Shares can be traded on many major markets such as: Hong Kong, South Africa, Singapore, London, Mexico, Vietnam, Indonesia, Korea, Italy, Philippines, etc.
SBLs are a simple and effective financial instrument that allows the Borrower to maintain a position in the market (no need to sell stock), while creating liquidity to meet an immediate monetary goal.
Because of the non-recourse nature of our loans, clients are able to use this product not only as a low risk source of liquidity, but it can also be used as a hedging tool to protect gains in the value of the equities being offered as collateral.

Key Points

GPG's loan structures offer a wide range of benefits, including some notable difference from those offered by banks, securities brokers and other counter-parties:
Non-recourse (i.e., no additional personal assets need to be pledged as security/borrower´s risk is limited to the collateral shares).
Loan amounts can range from under $1M USD to over $100M+ USD per tranche.
No margin calls.
No Short Selling.
GPG able to accept a wider range of stocks including micro-cap/small-cap shares as collateral.
LTVs typically ranging from 40% to 70%.
Loan terms can range from 24 to 60 months.
Fixed annual interest rates typically below market rates (3% to 7% per annum).
Ability to retain upside market appreciation.

Security Backed Loan – Process & Timeline

Anticipated Process Timeline

Week 1:

Borrower submits inquiry for loan by providing a stock symbol, number of shares to pledge and target loan amount. Lender determines the viability of the loan, and calculates a loan-to-value ratio (LTV), duration and the interest rate, based on an assessment of both short and long term risks.

Lender issues a term sheet to borrower. Terms are negotiated & finalized. Borrower signs term sheet, completes questionnaire, and sends copy of passport and brokerage statement to lender.

Week 2:

Lender receives Term Sheet and sends contract to borrower for review.

Final contract is negotiated & signed.

Week 3 & 4

Borrower opens brokerage account at lenders designated brokerage firm.

Both parties coordinate a delivery date with their respective brokerage firms for delivery of collateral.

Once lender has been notified collateral has been delivered, the loan is funded according to the loan agreement.

Convertible Facility

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Company Overview

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