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Individuals and businesses will often struggle with a key tradeoff: capital or liquidity. This is a Investing in the market offers several benefits. You’re able to earn a much higher return than if you simply received interest on a savings account. It also keeps you more attuned to financial markets, economics, and business trends, because as Warren Buffett would put it, you have a bit of “skin the game”. However, it carries some obvious drawbacks as well. Two of the main ones are these: you can’t use your money if it’s sitting in the market, and you expose your money to the risk of huge stock price movements, as well as larger market crashes.
At International Liquid Capital, we remove these drawbacks. We make sure you keep your stocks and have cash today, so that you stay liquid and enjoy the winning side of equity investment, without the looming fear of horror stories that the market inevitably goes through.tradeoff between owning assets that generate a return, such as land, equipment for your business, and equities; and holding cold hard cash. Holding cash will earn you little or no interest, but it’s a huge benefit to have cash on hand when the unexpected occurs, such as a major expense or time-sensitive business opportunity.
Many professionals know the secret that this trade-off between liquidity and capital, between having cash or earning a return, doesn’t have to exist. Successful businesses and individuals often outmatch their competitors by taking on debt they can manage, at a rate that beats the performance of their assets, and at an acceptable risk to them personally. This is the type of borrowing that International Liquid Capital offers.
At International Liquid Capital, we won’t take ownership of your securities unless that’s how you decide to end the loan. That means that your securities, and all gains made during the loan term, stay yours. We aren’t taking the securities from you, they’re simply pledged until the loan term is complete.
Number of Benefits
The value of securities can fluctuate much more than other assets, and therefore, your collateral may not be worth repaying the loan. This can happen with more stable assets, such as a home, but borrowers have few options for protecting themselves from a debt that is greater than their asset. With stock loans, you can walk away at any time at keep the cash, making it a great hedge against the infamous stock volatility that can wipe out fortunes in a matter of days.
Stock loans include quarterly payments and competitive interest rates, around 6% annually. Even individuals and businesses with excellent credit will struggle to beat that rate, and you’re naturally entitled to any dividends and appreciation of your pledged securities: they’re yours after all!