Providing Equity Funding to Publicly listed companies

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Frequently asked Questions about Stock Loans

Stock Loans FAQs

Please click on the appropriate section below, related to your question, in order to view the answer.

What is a Non-Recourse Stock Loan?

A Non-Recourse Stock Loan is a type of loan in which the owner of the stock traded on a approved public exchange can borrow up to 80% of the stock portfolio's market value without having to sell those shares of the stock.

How does a Non-Recourse Stock Loan work?

The shareholder/owner of the stock can borrow against the current value of the stocks, pay a low interest rate quarterly in the arrears for the term of the Stock Loan. At the end of the term of the Stock Loan, the shareholder/owner can pay off the loan and receive the stock back, along with any accumulated appreciation. The shareholder/owner can also extend the loan or if the stock loan price as fallen below a certain percentage of its value, they can give up the shares without the responsibility of having to repay the loan (non-recourse loan).

What is the LTV percentage value?

The Loan to Value percentage actually varies. It is dependent upon the quality of the underlying security being put up for collateral. LTV percentage can be as high as 80%, again dependent upon the security. Each loan's LTV is determined on a case-by-case basis.

What is the interest rate on the Stock Loan?

The low interest rate depends upon the type of security and the quality of the security. Other rate determining factors include the volume and share price of the stock.

What determines the eligibility for a Stock Loan?

At a minimum, we will look at those publicly traded stocks that have a minimum of $50,000 USD daily trading volume.

How Long Does it Take to Finalize the Stock Loan Process?

The Stock Loan process can take anywhere between 5-7 business days after receiving proper required information.

What are the risks associated with Stock Loans?

Non-Recourse Stock loans are considered to be of minimal risk category, due to its non-recourse nature. However, it is to be noted that there are risks involved with any type of stock transaction.

Are there any limitations to the use of the cash loan proceeds?

The proceeds can be used for essentially anything, such as business expansion, investment, etc.

What are the tax implications associated with a Stock Loan?

RF Global Holdings best recommends consulting a tax advisor for any tax related concerns for Stock Loans.

What are the consequences if I default on the Stock Loan or do not make the payments?

With a non-recourse stock loan, there are no personal or corporate liabilities if default should occur on the loan. The only recourse would be the loss of the security which was provided as collateral, which is the stock itself. The shareholder/owner would be able to keep any proceeds that are received from the stock and the lender is able to keep any interest that is earned from the loan as well as the stock. A tax advisor should be consulted to determine the tax implications of defaulting on the stock loan.

What can be done if the value of stock falls tremendously?

The borrower can choose from two options:

Option 1: If the stock value decreases, the borrower can default on the stock loan and walk away without any penalties. No payments would need to be made.

Option 2: Should the stock value fall below the agreed upon level, there will be a default. The borrower has the option to provide additional shares at a discounted rate or cash to maintain the value of the loan. However, this is solely at the discretion of the borrower. It is up to the borrower to determine whether to add additional capital into the loan or to terminate the loan.

During the term of my Stock Loan, who owns the stock?

During the course of the loan, the stock is transferred to the lender. However, the borrower will be able to keep the benefits of the securities, such as dividends.

Please Note: You understand and agree that RF Global reserves the right to share the information that you provide when inquiring about Stock Loans to reputable Third-Parties. Stock Loans are subject to each country's particular Laws and Regulations. Stock Loans are also subject to volume and price.

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rf global holdings

RF Global Holdings LLC, 5605 Riggins Ct, 2nd Flr, Reno, NV 89502

RF Global Holdings LLC its principals, members, officers, attorneys, managers, operating managers and directors (collectively referred to as “RF GLOBAL”) are neither registered investment advisors, mortgage brokers, real estate brokers, broker dealers nor financial advisors with any state/federal agencies within the United States or any other country. RF GLOBAL is not an underwriter. The funding it provides is based on specific terms and conditions, including the price and volume of the company’s shares once the company is publicly listed. RF GLOBAL does not provide volume, liquidity, public relations services or investor relations services. Legal documentation preparation fees are paid by the Company directly to a law firm that represents RF GLOBAL and is non-refundable for any reason. Any legal documentation fees, commitment fees, costs or expenses, are non-refundable for any reason and any funding RF Global provides is subject to all the terms and conditions of the fully signed Reserve Funding Agreement. You understand and agree that no information contained in this correspondence constitutes legal, accounting or tax advice of any kind, and you should contact an attorney or accountant before using any of the information described in this correspondence for your business, company or transaction you are involved in or are contemplating. RF GLOBAL is not responsible for the content of any third-party documentation. RF GLOBAL has the right to act as an intermediary, consultant or joint venture partner in any transactions in which it is involved.