How can loans against non-marginable securities provide the liquidity your business needs?

How can loans against non-marginable securities provide the liquidity your business needs?

Non-marginable Security

Businesses need capital to survive. If your company is not very liquid, meaning the majority of your capital is tied up in assets that you need or just do not want to sell, then you could have trouble covering expenses or other cash expenditures as they arise.

In this common business situation, you must turn those assets into something more liquid for operating your business on a day to day basis. Since you smartly do not want to sell these assets to raise the capital, a loan against a non-marginable security should be at the top of the list of possible options you are considering.

A non-marginable security is any security that you cannot purchase on margin, or seek a margin loan against through your traditional broker. This applies to a variety of different security types, all of which do not qualify for a margin loan, many times because of regulations put in place by the brokers themselves as to what type of securities qualify for margin borrowing.

Many of these are vital assets a business must maintain to continue operating their business and paying employees as they normally would. These assets are crucial to a business’s success and survival, so managers and stakeholders rightly do not want to sell them.

Or, sometimes the assets are appreciating annually and returning a sizeable amount, so the stakeholders or manager of the business do not want to sell these assets because of the continuous cash flow the assets are providing to the business.

Often times not wanting to sell these assets results in a majority of the company’s assets being non-liquid, meaning the company may struggle to cover its monthly expenditures. This type of scenario can result in a business doing things they normally would not just to cover expenses, things that may negatively affect the bottom line of the business or even negatively affect the long-term success of the business.

Many smart managers and business owners understand this common problem and have strategies and procedures developed and put into place to mitigate this concern. The assets your businesses own and use are most valuable to you and your business, so we at Easy Stock Loans understand this, and we have options available to turn those assets into cash, while never selling them.

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If your business can get a loan against these non-marginable securities at an interest rate below what the assets are earning, then the loan would be profitable for the business. All while giving the business the capital it needs to continue operating and maintaining ownership of the assets.

Borrow Against Restricted

A loan against a non-marginable security is not the best option for some businesses, but it is also the only option for other businesses. In today’s modern economy where things move at rapid pace, the ability itself to have cash on hand on short notice is one of the most important tools a business can have. At Easy Stock Loans, we have a program developed specifically for these situations, or we will develop a unique plan to address your particular needs.

Contact an Easy Stock Loans representative to discuss how we can provide you the resources you need to continue growing your business.

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. Easy Stock Loans is not affiliated with the named representative, broker – dealer, state – or SEC – registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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