The growth of Stone Creek Global’s enormous footprint as an industry-leading direct & private lender across all major stock exchanges has enabled borrowers to prosper from our favorable terms; the lowest, simple, fixed-interest rates allowing for greater term flexibility and, the highest-loan-to-value on pledged securities.

It’s our core compass to provide expert stewardship in offering a boutique of specialty financing arrangements that are far more likely for our borrowers to secure a sizeable leveraged equity loan than from traditional financing institutions.

Upon exploring each of the listed corporate structures, Stock Loan Exchange and its affiliates do not give legal advice, tax advice nor make any financial predictions.  Please refer to the Terms/Closing documents for specific terms applicable to you. We recommend contacting a professional as each country has its own tax advantages/disadvantages and securities laws.

At SCG – We are afforded the luxury of working with the most Elite & Prestigious International Law Firms, Transfer Agents and Custodian Banks in over 195 countries worldwide. SCG Terms/Closing documents are Tried & True, Examined & Reviewed under tremendous scrutiny amongst the highest ranked “Super Lawyers” in the legal profession.

SCG strongly encourages our loyal clientele to perform deep due diligence measures in vetting SCG & Stephen Decker, President, and our profound performance history. The discovery results will speak volumes as SCG has never once failed to meet all financial obligations with any borrower upon executing closing documents.

Corporate structured financing is one of the very subtle mechanisms of a business that can inject massive amounts of liquidity for saving companies across all markets worldwide. Ideally, all companies require finances for daily operations to maintain growth forecasts, working capital and many other areas of the business. As traditional financing needs are being pushed back, and lines of credit are being pulled, this is what fuels the concept of corporate loan structures as an important utility for all organizations to explore. 

Across all markets there is an underlying need to keep a business well financed and managed, in alignment with the economic development and geopolitical goals of the country, and that is where corporate structured – utilities ferret best as an alternative solution to secure instant liquidity with leveraged equities loans offered by SCG.

Prior to funding, all borrowers enjoy the opportunity to discuss and review the final loan agreement with Stephen Decker, President and Mark Brundage, Chief Business Development Officer. 

A legal opinion and case law study may be required as part of the overall due diligence process. This is because each market across the globe, each country and its exchanges all have different legal, securities, and tax laws.  As an example, rules on the handling of Treasury Shares differ from market to market as each country has its own laws concerning corporate loan structures. 

Corporate Loan Structures involve a more detailed process than straightforward Non-Recourse – Non-Title Transfer stock loans for individuals seeking funding. There are many different scenarios. Some countries and exchanges allow listed companies to make decisions regarding treasury shares carte blanche, whereas others require a formal notice, filings, a board meeting, or shareholder approval. Some jurisdictions require free-trading shares rather than restricted shares. 

Restriction periods for 6-months, 12-months, and even up to a 24-months are possible depending on the exchange and country of the stock. Different borrowers’ legal teams in the same country bring forward different interpretations on the laws and rulings.  This results in one company moving forward with the loan while another chooses otherwise. 

Last, if for any reason you still have questions on the Loan Process, refer to the Services tab and review Details On Loan Process. Our system has been perfected for over 14+ years. This is a reliable, safe and proven method to guarantee you are funded and satisfied. SCG is the only lender in this industry that places these safety measures and timelines in place for you to be funded exactly per the loan documents. Our funding is rapid. The limiting factor is always how quickly borrowers submit their documents and advance through each step. 

Our expert team will align efforts with your team of professionals to create a rewarding roadmap specific to your corporate needs. Now let’s delve into the different types of corporate loan structures to maximize your funding requests.

What is Back-to-Back Loan?

In basic terms, a back-to-back loan is a type of corporate structured loan agreement between an entity or an individual and a bank – when the bank grants credit against pledged liquid assets up to a certain percentage of their value (LTV). The free trading, liquid assets may be in the form of equities, bonds, or investment funds.

In our scenario – Eligible securities include stocks, penny stocks, credit-worthy bonds, ETFs, and other marketable securities. We lend against securities traded on most domestic and foreign exchanges.

Why take out a back-to-back loan?

A back-to-back loan has several major advantages. One of the most advantageous, your assets remain invested while you achieve additional liquidity. You will continue to receive any appreciation on the shares including dividends. In addition, this type of corporate loan structure could fund personal goals including liquidity for growth of the company all in the same transaction.

For example, you hold a large, concentrated position of free trading stock shares in the company. The shares are valued at $150MM USD. Suddenly, you receive a once-in-a-lifetime opportunity on a corporate jet priced at 50% below its actual market value. If you do not have liquidity for the purchase, you may consider selling off your stock position and go for this high valued offer.

However, there are financial mechanisms available to allow you to get your dream corporate jet without the need of selling off your shares. By taking advantage of a back-to-back loan with SCG, you can pledge your free trading shares in a tailored corporate loan structure that offers many advantages for yourself personally and the company.

Apart from bridging any personal and business liquidity shortages, a back-to-back loan can also be beneficial for diversifying your investment portfolio as well as your wealth structure in terms of taxes. Additionally, since the back-to-back loan is secured by pledging of your underlying shares, this type of loan is less risky as opposed to a tradition loan that is not secured, therefore, you can also benefit from our low fixed-interest rates.

The above only outlines a few advantages that are available when customizing a corporate structured back-to-back loan. For instance, we have listed a number of reasons as to why a public company or individual would consider all the advantages this type of financial mechanism. There could be share structure concerns at the company treasury level including restrictions issues, authorized shares have been met, company wishes to take appropriate actions in filing for unlimited shares authorization – just to name a few.

There is other advantage that can be considered in customizing this type of corporate loan structure such as a wraparound or even a structured swap to afford the ability to assume interest payments – this list goes on. Now, let’s look at the “Bugatti Loan” for instance. It just does not get any better!

The flexibility and creativity of our corporate loan structures allows SCG to craft custom-tailored financing for the maximum benefit for our clients at the lowest cost.

As an example, let’s say we have a fourth-generation public company whose CEO holds millions of free-trading shares. The company in this scenario seeks an injection of liquid capital for international scale-up purposes. In some cases, the company cannot directly pledge its shares for funding – perhaps its Treasury shares are restricted. One gambit is for the Board to approve the CEO leveraging his free-trading shares to accommodate the needs of the family operation.

In exchange for the benefit to the company of its executive putting up his own personal free-trading shares, the Board can elect to issue three restricted shares for every one he has pledged.

The company can also issue warrants as another added bonus in the corporate loan transaction. It may issue 2-5 warrants per share pegged at a future pre-determined strike price of $1.00. In case of a catastrophic market event such as a full gap-down and the stock drops to $0.05 per share, the company can elect to issue twenty more warrants per share pledged to hedge the additional downside.

Considering the forecasted worldwide recession, soaring interest rates, and banks pushing back on lending, the Board chooses to lock down guaranteed low rates for 10 years which are fixed and simple interest, with interest-only quarterly payments. This combination of features is unheard of in banks or institutional lending.

Depending upon the country and stock exchange, the issued restricted Treasury shares will become free trading between 6-24 months.

Meanwhile, our financing facilitates significant company growth on an international scale. This results in an uptick in stock value which places the CEO in an extremely fortunate position, designed from the outset.

Advantages & Key Takeaways

There are many advantages to be evaluated while considering a corporate loan structure. In some cases, the CEO may be willing to leverage personally held shares to help secure funding regardless of any share structure issues at the treasury level. In some cases, the CEO may not be familiar with the diverse types of loan structures available, and may only have one goal in mind, secure funding for the company.

In some cases, the CEO could leverage his free-trading shares and secure liquidity for himself personally and/or fund the company operations simultaneously. In this scenario, the shares could be locked up for many years based upon the agreed terms, and the benefits could be significantly minimized. Shares on a personal loan could place an enormous number of limitations by eliminating many valuable benefits offered in a corporate loan structure.

For example – Stock is trading at $0.50 cents per share.

Let’s review a few key advantages:

A. Company secures a low fixed-interest rate
B. Company secures favorable terms for quarterly budgeting
C. Company assumes all quarterly interest payment obligations
D. Company takes over all loan obligations – Swaps position in the loan process
1. CEO could receive a 2-3:1 ratio of restricted shares in exchange for free trading shares in the loan process
2. CEO could receive a 2-5:1 ratio of warrants as a bonus/sweetener for free trading shares provided for the loan process
3. CEO restricted shares could become free trading shares in 6-24 months depending on exchange ruling and securities laws
4. CEO could have a greater upside potential in a corporate loan structure by receiving additional shares & warrants based on a board meeting decision
5. CEO could have a hedge of protection in the event of a downturn in the market, or a sudden gap-down in the share price; could be 20:1 swap ratio dependent upon board meeting decision in the event share price drops to a level of $.05 cents per share
6. CEO could fund the company operations all while multiplying his net worth many-fold
7. CEO & Company could achieve milestones of success could in the event the company performs on growth forecasts.

As the company scales and grows, you will likely seek to acquire another organization. This is an important business decision that can promote further growth into the company’s future. As a leader, you will have the opportunity to evaluate which corporate loan structure and financial mechanisms provide the most value for the company and future executives in each acquisition in the pipeline. 

In the beginning, our executive team will assist in customizing a tailored corporate solution to facilitate the company’s required goals. In addition, we will help in every step of the process including liquidity on the seller’s restricted shares issued off the treasury in each corporate acquisition. One key component in leveraging our services on the front-end of securing corporate funding, your team will have established a credible and reliable funding source for all future acquisition needs from funding the acquisition to providing liquidity thereafter for each seller. 

There are multiple advantages when a transaction is properly structured and certain mechanisms are implemented. In most acquisitions, the sellers will require some amount of cash in the transaction. When structured accordingly, the company can monetize shares issued off the treasury to help from exhausting the company’s cash reserves. While there are many other reasons to consider a tailored corporate loan structure, here are a few key purposes: 

1.  Funding for general working purposes 

2.  Funding for earmarked acquisitions

3. Provide liquidity on seller’s shares

Many times, borrowers may require assistance on security details. There are three different scenarios: unlimited, authorized, and restricted. Most often, borrowers do not obtain access liquidity due to not having a complete understanding on how to maneuver around certain security detail limitations when faced with obstacles on authorized shares or restricted share issues.  

While most reading may have complete wherewithal on this subject matter, in some cases it’s common for a borrower to not possess the necessary knowledge when met with these issues. When working with existing and traditional lenders, or a local, institutional, or international bank, their full attention is focused on eliminating any risks associated with the loan, not on how to create more liquidity for the borrower or making recommendations such as obtaining board approval or filing the appropriate paperwork, etc. 

Our expertise can help pinpoint strategies that will open the door for the borrowers legal & tax professionals to determine which scenario is best suitable under each circumstance. 

SCG is a major source in providing exit strategy solutions for borrowers worldwide. There are several underlying reasons as to why a borrower may be seeking to exercise an exit strategy rather than electing to maintain ownership for any future appreciation including dividends. This is a common occurrence for largely held concentrated stock positions, and one of the specialty financial solutions we offer to help assist borrowers in their needs. 

Regardless the reason for selling, we have clientele seeking out solutions that affords them the ability to exit a stock position, while at the same time, requesting the highest loan-to-value ratio in the transaction.  In some scenarios, if all possible, the borrower would like to exit the position in a secured and private method without having to provide disclosure. Exiting the stock may not settle well with other board members in the company, family members, or other shareholders within the company. 

It could be the borrower may foresee a wide set of outcomes ranging from rare potential to earnings, future appreciation, to a more common occurrence of unrecovered catastrophic losses. Past performance may have not continued to provide superior returns, and the concentrated stock position could be wiped-out in a moment’s notice. As in life, so in stock: an extreme winner can be rare, and the promise of a company’s future growth expectations can blind an individual while evaluating the risks associated with that promise, even as an insider.  

Whether the individual arrived to hold a relatively large position in the company by inheritance, as stock compensation, or because they had purchased the stock that has bolted ahead over time, they can find themselves with a concentrated position that leaves their family legacy with an unwelcome level of risk. Exposure of any company-specific risk can lead to devastating losses in the event of company failure, industry upheaval, or a bear market. In any event, at all costs, the individual is motivated to exercise an exit strategy to obtain liquidity in the position.