FAQ on Free Trading Stock

What is DTC:  The Depository Trust Company is a corp. owned by Wall Street brokerage firms that acts as a go between in security settlements.  Ownership of stock and bond certificates are recorded on DTC’s computerized record-keeping system.  This  electronic system registers you as the owner of stocks and allows securities transfer to take place in a virtually paperless environment

What is DVP:  Delivery vs. Payment means that your loan proceeds will be delivered to your stock broker before the stock is transferred to the custodial account.  Brokerage houses require that your margin loan be paid off before the stock is transferred.

How long does it take to fund after the shares are in the lenders account: Typically same day.

What is the interest rate:  3.99% up to prime plus three.

Can I pay on the principal: Yes, but you still have to make the monthly interest rate payment.

Can I ask the lender to use my dividend payment for a loan payment:  No, because then it becomes a stock sale instead of a loan.  Client receives dividend and can make payment if they choose.

Will I get the same shares back after I pay off the loan: The lender reserves the right to trade the stock. You will get the same amount of shares but it may not be the same shares.

Can I use my loan money for anything:  You can use your loan money for anything you would like other than buying marginable securities.

What is the minimum and maximum loan amount: 100,000.00 is the minimum; there isn't a maximum amount.

Is the interest rate fixed:  The interest rate is fixed.

Do you accept certificates: We do but it could take up to 30 days for a certificate to clear.  It is better to DTC your stock.

Do you do credit checks: No, we only verify your address and phone number.

Why do I have to transfer my stock into the lenders name: The stock is transferred into the lenders name in the event that you  default.  Your stock would then be liquidated to pay off your loan.

Why is it better to get a stock loan instead of selling your shares now:  Generate liquidity without triggering a taxable event.  Also, with our stock loan you can be in two investments at the same time.   

Do you short sale the stock:  No.

What happens to my dividend payments:  We pass them thru to the Borrower.