Benefits of Asset Based Lending
• Simple & Quick –
NO Credit Check / NO Income Verification/ NO Upfront Fees
NO Closing Costs / NO Personal Guarantee
• Loans are “Non-Purpose” –
loan can be used for virtually anything borrower wants to accomplish
(personal or business)
• Loans are “Non-Recourse” –
giving the borrower the opportunity to simply “walk away”
if the collateral falls below a set floor amount
• High Loan-to-Values –
up to 80% LTV (depending upon security);
which is much higher than banks and brokerage companies can offer
• Loans are Interest Only –
principal payment at maturity; otherwise loans can be refinanced or extended
• Low Fixed Interest Rates –
usually between 2% to 5%
• Loan Term Flexibility –
minimum of 3 yrs; also 5 yr / 7 yr / 10 years
• Quick Funded –
usually within 5 to 7 business days
• Borrower Maintains Beneficial Ownership –
borrower keeps all upside market appreciation. In addition, borrower receives credit against their interest payment for all dividends or interest on bonds. An added benefit is that the lender is responsible for taxes on the dividends during the loan term. It is a loan (not a constructive sale) per section 1058 of the IRS Code.
• This is NOT a Margin Account Loan –
A securities based loan is not a “margin account loan”. These loans have significant advantages over conventional margin loans. Here is some differences between ICON’s Securities-Based Lending and margin loans -
1. Typical Margin Loan – FULL Recourse loans — additional liability, fees, and penalties may be assessed.
ICON Securities Loan – 100% NON Recourse with NO personal liability; you may walk away from an ICON loan with no penalties & NO negative credit reporting.
2. Typical Margin Loan – For many brokerage houses, a credit requirement has been added as a qualifying factor.
ICON Securities Loan – ICON does NOT check your credit nor income.
3. Typical Margin Loan – 50% LTV ratio
ICON Securities Loan – Up to 80% LTV ratio; depending upon securities’ trading volume and liquidity.
4. Typical Margin Loan – Variable higher interest rates (typically 5% to 8% ARM’s)
ICON Securities Loan – Fixed lower interest rates from 2% to 5%
5. Typical Margin Loan – Not all NASDAQ, AMEX, NYSE stocks are “marginable.”
ICON Securities Loan – Loans available against all types of securities that qualify (including OTC:BB, “pink sheets”, and certain foreign exchanges).
6. Typical Margin Loan – are not allowed to lend on stocks valued at less than $10.00 per share.
ICON Securities Loan – we offer the loan on any share price.
7. Typical Margin Loan – If the share price drops below 75 percent to 80 percent of original total stock value, a margin call is initiated and may you normally have only one day to cure the default, which may result in the unwanted sale of your securities.
ICON Securities Loan – ICON has a flexible process to “cure” your loan default. ICON’s “call” is set at 80% of the loan amount (approximately 65% of the stock value) and we offer 5 days to cure the default instead of only one day. Since ICON’s loans are non-recourse loans, if the borrower cannot cure the loan default they may simply walk away.
ICON’s Commitment to Our Clients
ICON’s Loan Criteria – Qualifying Securities
Comparing Securities Lending to Margin Loans