Securities Backed Loans

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Use your Stocks, Bonds, Mutual Funds, Options or US Treasuries as collateral for a quick and easy loan with interest rates between 2.5% and 4.5% FIXED. Loan terms from 3, 5, 7, or 10 years. Get up to 80% of the market value of your portfolios within 7 to 10 days.

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Securities Backed Loans

  1. 1. Securities Backed Loans Prepared by: Aaron K. Gilbert, President Optimum Funding Group, LLC 10940 S. Parker Road, #772 Parker CO 80134
  2. 2. Securities Backed Lending • Investors can utilize their securities portfolios of Stocks, Bonds, Options, Mutual Funds and/or U.S. Treasuries to secure quick access to funds at great low interest rates.
  3. 3. Loan Purposes Any personal or business purpose is acceptable • Payoff personal or business debts • Payoff tax liens • Take advantage of business opportunities • Buy or refinance Real Estate • Take a long vacation trip around the World…
  4. 4. Benefits • Fixed interest rates between 2.5% and 4.5% • Interest Only quarterly loan payments • Loan terms of 3, 5, 7, or 10 years • No credit or income verification • Funds may be used for any purpose including personal or business use • Non-recourse loan. The only collateral are the pledged securities - not real estate or other personal property. • Loans available for up to 80% of the securities value • The borrower keeps all dividends and upside market appreciation on the securities • Domestic or International securities accepted
  5. 5. How It Works • Loan-to-value ratio and the interest rate are driven by what securities are pledged. The more liquid and actively traded securities the higher the loan-to-value ratio and lower the interest rate • No principal amortization or loan prepayment • At the end of the loan term the loan may be renewed, refinanced, or paid off • At pay off, the exact number of shares initially pledged is returned to the borrower • Default trigger set at 80% of the loan amount not 80% of the securities value like typical margin loans. For example: securities value of $1MM, loan of $800k, default trigger at $640k (80% of the loan amount). If the securities value fell below $640k the borrower could walk away from the obligation of repayment of the loan and securities and keep the original loan proceeds ($800k) or contribute cash or securities to bring value back to $640k.
  6. 6. Documentation Required • OFG Loan Application and Fee Agreement – Obtain at: www.securitiesbacked loans.com • Copy of most recent Brokerage Account Statement showing securities that are eligible for financing.
  7. 7. Fees Collected • Processing Fee: $300.00 • Origination Fee: Between 2% and 5% depending upon the size of the loan funded. LOAN AMOUNT FEE $50,000 - $99,999 5% $100,000 - $499,999 4% $500,000 - $999,999 3% $1,000,000 + 2%
  8. 8. Criteria • The stock must be free- trading without any restrictions. • Minimum Loan Amount: $50,000 • No Maximum Loan Amount • Retirement funds (401k's, pensions, etc), CD's, do not qualify for this program.
  9. 9. Time Frames Here is the time-line and a quick overview of the steps for the completion of the transaction. • Submit a Request for Quote. Once we receive your request a Term Sheet is issued. Usually within 24 hours. • The borrower will be asked to complete a simple 2 page application form. Neither income or credit is not asked. It is simply who you are and where do you want the funds wired to. • A conference called is placed between the borrower and the Funder to answer any questions. • Loan Agreement is sent to the borrower to sign and they then transfer the securities to the Funder. • Funder tracks the closing price of the shares for 3 days to obtain an average price. • The loan is disbursed based upon the loan-to-value previously agreed upon. • Borrower makes Interest Only payments quarterly. • Any dividends from the securities is credited to the loan payment and any excess is returned to the borrower in the form of a check. • Note: Dividend payments made on behalf of the borrower towards the loan are not taxable. • At the end of the loan term the loan is paid off and the same amount of shares are returned to the borrower. • The time frame from start to finish may be as little as 7-10 days.
  10. 10. Margin Accounts vs. Securities Backed Loans quot;What is the difference between Margin Loans and Securities Backed Lending?quot; Here are a few of the differences: • Margin loans can only go up to 50% of the value of the stocks - we are able to go to 80%. • Margin loans are not allowed to lend on stocks valued at less than $10.00 per share - we offer the loan on any price share. • Margin loans rates are typically 5-8% ARM's - We are between 2.5 - 4.5% fixed rate. • Margin loans are FULL-recourse - ours are NON-recourse with no personal liability. The quot;callquot; on margin loans is set at 80% of the stock value and they have one day to cure – our quot;callquot; is set at 80% of the loan (approximately 60% of the stock value) and we offer 5 days to cure and since ours are non-recourse if the borrower cannot cure the loan default they can simply walk away.
  11. 11. Simple Steps • Complete a Loan Quote Request Form listing the number and name of securities and symbol or send us a copy of your most recent brokerage account statement. We will quickly determine the amount of the loan and the interest rate available and prepare a loan proposal for you. • If you agree to the terms the next step will be for you to provide proof of ownership of the securities. We will then verify the values and within a few days the loan proceeds are transferred into your bank account. • Upon repayment of the loan at the agreed upon terms the same amount of securities will be returned to you. It's that simple!
  12. 12. Where to Next? • If you have any further questions or if you wish to obtain a loan quote on your securities, then please go to: www.securitiesbackedloans.com • Within approx. 24 hours of submitting a Loan Request Form, you will receive a proposal of the terms and conditions we are able to offer you.

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