Because the loan programs we offer are managed through top-level capital management desks at SIPC-member brokerage firms, all of the flexibility of expert loan advisors is at your disposal from the start. There are two broad categories of lending that have been pre-built into these facilities:

The first is our standard limited liability Hedged Portfolio Loan structure. Clients with optionable securities (see Options Clearing Corporation for current list) can choose to structure an option into the loan or to collar the loan as a hedge against default. When structured properly, should the client-borrower find themselves unable to repay their loan, their liability can thus be limited to the surrender of the collateral assets as fulfillment of the loan obligation following exercise of the hedge.

Although this is not guaranteed that the entire debt obligation can be covered in such case - it is always possible, in theory at least, for some liability to the lender to remain even after surrender of shares and exercise of the option - in practice a defaulting client should have no further risk of asset attachment in the even of default if the hedge has been structured properly. .

Standard structures. "Standard" structures for these loan facilities are so wide and varied that it is almost impossible to use the term with any degree of accuracy. Rather, we use this to describe all other forms of institutional custom loan structuring available through your institutional brokerage and your licensed account advisor once you've commenced final deliberations on your loan terms. This facility can accommodate everything from margin loans all the way to highly complex collateral foreign securities arrangements that invariably meet the original funding goals of the client. Callable, limited call, non-call, limited recourse, capped upside, principal paydowns and many other elements and variants can be built into your final loan depending on your objectives and the quality/size of your portfolio.

Regardless of loan structure, it bears repeating that your securities remain in your account and title at all times, and are not sold to fund your loan under this type of loan facility. It is also important to note that unless structured otherwise with your consent, your freedom to prepay (payoff the loan balance) at any time without penalty always remains.

For further details and answers specific to these programs, please inquire here.

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