Securities Backed Loans

Hannah Capital has access to several capital providers nationwide and offers access to Securities Backed Loans from $100,000 and up. This type of lending allows the borrower to use their investments (stocks, mutual funds, bonds or other securities) to obtain funds for personal or business use. Using investments as collateral it is possible to borrow money at low interest rate financing for up to 10 years.

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

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 the 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.

Documentation Required

Loan Application and Fee Agreement
Loan Quote Request Form
Complete copy of most recent Brokerage Account Statement (all pages, even if blank)

Fees

Non Refundable Processing Fee: $500.00. To be paid in conjunction with submission of Loan Quote Request Form and credited against Origination Fee upon closing.
Origination Fee: Between 2% and 5% depending upon the size of the loan funded.

Criteria

The stock must be free-trading without any restrictions.
Minimum Loan Amount: $100,000
No Maximum Loan Amount
Retirement funds (401k's, pensions, etc) do not qualify for this program.

Next Steps

Complete the Loan Quote Request Form and submit the non refundable processing fee of $500.
We'll issue you a term sheet within 48 hours of receipt of all documentation.
If you agree to the terms, you'll be asked to submit the loan application and provide proof of ownership of the securities. Neither income or credit will be asked for or verified.
A Loan Agreement will be sent to you for signature at which point you'll be required to transfer the securities to the Lender.
Lender then tracks the closing price of the shares for 3 consecutive business days to obtain an average closing price for each security.
The loan is disbursed based upon the loan-to-value previously agreed upon in the term sheet.
You'll be required to make Interest Only payments quarterly.
Any dividends from the securities are credited to the loan payment and any excess is returned to you 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 originally pledged are returned to the borrower.
The time frame from start to finish may be as little as 7-10 days.