Increase Business Capital - Expand Capital with HedgeLoan Stock Loans and Securities Finance Services

Using a Premier HedgeLoan® Stock Loan or Premier Securities Loan to Expand Your Business

What's the HedgeLender Solution? It is the opportunity to expand your business with interest-only repayment or interest-accrued repayment while still retaining participation in your stock or securities portfolio using Premier securities financing. John Shareholder owns a farm with a 10% interest note that collateralized by all of his equipment and most of his other farm assets. He needs expansion capital and owns 100,000 shares of the stock XYZ worth $10 a share, but he expects good news this year that he hopes will boost the stock's price and really doesn't want to liquidate his interest in it. One solution: With a Premier HedgeLoan with a current LIBOR-based floating rate of 4.35%, he can refinance the farm, get the capital to grow the business and remove the liens from all other assets. If his favorite stock goes up, he can participate in the upside. If structured with an option in a Premier HedgeLoan and for whatever reason he was forced to default, he could exercise his right to surrender the shares and would owe nothing more unless the exercised option produced cash insufficient to cover the remaining loan liability. The good news? Either way, he kept the capital he needed and could grow his farming business.	Behind the Numbers: Example: Note on farm : $500,000 @ 10% interest. Working capital requirement: $200,000. Total needed: $700,000. Proceeds from 75% LTV HedgeLoan of $1MM of the stock XYZ: $750,000. Depending on LIBOR rates, he would saves at least $15,000 per year in interest expense on the existing $500,000 note on the farm. He can invest $200,000 in new land, supplies, etc. He can participate in upside of stock (or securities, if appreciable) if they rise in value, and freely exercise the default option if necessary. In addition, he can go to the bank to get financing if he needs it in the future because all of his assets would now be free and clear. And the remaining $50,000? Perhaps a new tractor for the farm, or a new car for the spouse? Please contact us here for your questions or to get a quick Premier HedgeLoan® or Premier securities loan quote.
Have other problems or challenges? Visit our other Solutions summaries.

What's the HedgeLender Solution?

It is the opportunity to expand your business with interest-only repayment or interest-accrued repayment while still retaining participation in your stock or securities portfolio using Premier securities financing.

John Shareholder owns a farm with a 10% interest note that collateralized by all of his equipment and most of his other farm assets. He needs expansion capital and owns 100,000 shares of the stock XYZ worth $10 a share, but he expects good news this year that he hopes will boost the stock's price and really doesn't want to liquidate his interest in it.

One solution: With a Premier HedgeLoan with a current LIBOR-based floating rate of 4.35%, he can refinance the farm, get the capital to grow the business and remove the liens from all other assets. If his favorite stock goes up, he can participate in the upside. If structured with an option in a Premier HedgeLoan and for whatever reason he was forced to default, he could exercise his right to surrender the shares and would owe nothing more unless the exercised option produced cash insufficient to cover the remaining loan liability.

The good news? Either way, he kept the capital he needed and could grow his farming business.

Behind the Numbers:

Example:

Note on farm : $500,000 @ 10% interest. Working capital requirement: $200,000. Total needed: $700,000.

Proceeds from 75% LTV HedgeLoan of $1MM of the stock XYZ: $750,000.

Depending on LIBOR rates, he would saves at least $15,000 per year in interest expense on the existing $500,000 note on the farm. He can invest $200,000 in new land, supplies, etc.

He can participate in upside of stock (or securities, if appreciable) if they rise in value, and freely exercise the default option if necessary.

In addition, he can go to the bank to get financing if he needs it in the future because all of his assets would now be free and clear. And the remaining $50,000? Perhaps a new tractor for the farm, or a new car for the spouse?

Please contact us here for your questions or to get a quick Premier HedgeLoan® or Premier securities loan quote.

Have other problems or challenges? Visit our other Solutions summaries.

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