Securities Backed Loans
Prepared by: Aaron K. Gilbert, President
Optimum Funding Group, LLC
10940 S. Parker Road, #772
Parker CO 80134
Securities Backed Lending
• Investors can utilize
portfolios of Stocks,
Mutual Funds and/or
U.S. Treasuries to
secure quick access
to funds at great low
Any personal or business
purpose is acceptable
• Payoff personal or
• Payoff tax liens
• Take advantage of
• Buy or refinance Real
• Take a long vacation trip
around the World…
• 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
• 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
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
• At pay off, the exact number of shares initially pledged is returned to the
• 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
• OFG Loan Application
and Fee Agreement
– Obtain at:
• Copy of most recent
securities that are
eligible for financing.
• 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%
• The stock must be free-
trading without any
• Minimum Loan Amount:
• No Maximum Loan Amount
• Retirement funds (401k's,
pensions, etc), CD's, do not
qualify for this program.
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 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.
Margin Accounts vs. Securities Backed
quot;What is the difference between Margin Loans and Securities Backed
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.
• 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
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:
• 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