What is the Intelligent Alternative?

 

 

It is the opportunity to expand your business
with interest-only repayment while still retaining
participation in your stock portfolio using an
Intelligent Alternative Stock eLoan.
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 will boost the stock’s
price and doesn’t want to liquidate.

 
Solution:

With a Stock Loan @ 6.99% interest fixed, 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, and if it goes down, he can exercise his right to
default on the loan (with no reporting to credit bureaus)
and the collateral stocks acting as full satisfaction of the
Stock Loan obligation. The good news? Either way, he keeps the capital he needed for expanding his farm.
 
Example:

 

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

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

* He saves $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 if it appreciates, and freely
exercise the default option if it depreciates.
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?

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