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Numerian Capital

FAQ’s

Frequently Asked Questions

Who is Numerian Capital?

Numerian Capital specializes in providing funding facilities from $100,000-$25,000,000 for stock-backed securities on a non-recourse basis through a term loan program (3-6 years) for shareholders, company founders, executives and block traders.

We are able to provide innovative financing structures our competitors simply cannot provide due to our experience and pool of long term capital.

The Numerian Capital difference is clear, we have strong longstanding relationships and we provide customers with clear and easy to understand financing options. Structured financial solutions, excellent client service, solid liquidity and borrower protection.

We work with our customers to understand their needs and above all create long-term relationships.

Are you a Direct Lender?

Numerian Capital, Inc. is not a registered U.S. Broker Dealer, nor licensed to buy and/or sell securities. Numerian Capital, its associates, management, officers, directors, owners, employees, agents, are NOT direct lenders.  ALL transactions will be handled on a best-efforts basis, and at no time will the Company offer or confirm a commitment to lend. ALL lending commitments will (only) come from the Financier/Funder/Fund. We assist in the marketing, communication and set-up and we are a qualified liaison between parties.

Can my shares remain in the institution they are in currently? If not, why not??

No. Should there be a default on the loan, the onus would be upon the client’s broker-dealer to deliver the collateral shares to our financier, which many times is problematic, as no broker-dealer wants to reduce the assets they hold. The simplest and most effective solution is that the collateral shares must be held in a facility where our Financiers/Fund will have direct control of the shares’ disposition upon default without any obstacles.

Will you or your institution be trading my shares once I transfer them?

Our Financiers/Traders will likely trade the shares and reserve the right to manage the collateral as they see fit. An exception might occur within a unique loan structure, such as a high interest, month-to-month short term loan, with specific language in the agreement that the shares will be held for the duration of the loan. Any such discussions will occur directly between our Financiers and the borrower.

Once I pay off my loan, even if I pay the loan off early, how quickly can I move my shares out of the institution?

It is always specific to the loan agreement. Typically, once the loan has been paid back according to the agreement, shares are returned in less than ten (10) days, barring any unforeseen delays.

I was told that when my shares are used as collateral for a loan, that the Financier/Fund may perform “hedging techniques” to help mitigate risk. Why may the Financiers/Fund be at risk? What does it mean to “hedge”?

Our Financiers have a unique business model and a specific algorithm not used by any other finance group in the space. They simply have the most effective method of managing the collateral to minimize risk. The details of this model will be discussed directly between our Financiers and the borrower.

If I use my shares as collateral for a loan, and the price drops, what happens to my loan and shares?

Typically, if the value of the collateral drops below a specific percentage of the value determined at loan closing, usually around eighty percent (80%), a default is triggered. In most cases, should there be a default due to a drop in price, the borrower may have the option to either pay a cash difference, provide the Financier/Fund with more collateral shares, or simply walk away from the loan with no further action required and no negative consequences. The options are specific to the loan agreement signed by the borrower.

What are my risks— to my shares and to me personally?

There are really two main scenarios that present risk to the client:

The Financier/Fund goes out of business or becomes insolvent. In this event, if the Financier was unable to repatriate your shares, the borrower would still have received as much as 50% or more of the value up-front, meaning the borrower would have the potential to lose as much as 50% of the value of the shares. This is an extremely unlikely scenario because of the nature of the business model.

The loan defaults (either from a drop in price or a contractual default). In this case, the outcome is the same. Because the client received as much as 50% of the value up-front, the potential loss in the event of a default would remain the same at 50%.

So, in other words, the risk to capital is virtually the same—however, the mitigating factor is much more likely going to be the borrower, directly.

How long does this process take until I get my loan funds?

The process from intake form until a signed loan agreement can take as little as two (2) days. Loans with transfer of ownership (title) can fund as quickly as one or two days, if executed via DVP, or can take as many as five days after the receipt of the collateral shares if the pricing is based on a trading average. Loans with no transfer of ownership (title) typically fund within 24 hours from when the shares are placed on account (in the borrower’s name) with our Financier at their brokerage/institution.

So, in other words, the risk to capital is virtually the same—however, the mitigating factor is much more likely going to be the borrower, directly.

What is the difference between changing title and not changing title for a stock loan?

Titling of the collateral shares is at the discretion of the client, as both options are available. There is no difference in any respect between a loan where the title is transferred or a loan where the shares stay in an account in the borrower’s name at our Financier’s brokerage/institution. In either case, the collateral shares will still be under the control of the Financier. The process of a no-change-of-title is different as it requires an account to be opened at our Financier’s brokerage/institution and approved by Compliance, which can take a week or longer to set up. A title transfer transaction can be wrapped up and funded in a matter of a couple days.

What is a non-recourse stock loan?

Non-recourse stock loan by definition is a loan against the value of a stock whereby the shareholder can borrow against a percentage of the stocks market value, at a low interest rate for the term of the loan. At maturity, the loan can be paid off in full or refinanced (provided no default has occurred) and the Borrower will receive back the same number of shares. Alternatively, if the stock price has fallen below the LTV amount, the borrower can simply walk away from the loan without any further consequences or recourse.

How much can I borrow against my stock?

The loan to value ratio (LTV) varies depending on the intrinsic quality of the securities (stock). LTV’s are calculated based on evaluation of the potential risk and future performance associated with the stock. Generally the loan to value ration is 45% – 65%. Each loan’s LTV is evaluated on a case-by-case basis.

What types of securities (stocks) can be used?

Stocks must be freely traded securities. Currently in America, loans cannot be processed for restricted stock, but programs are available with other exchanges throughout the world.

How are the loans funded?

Most Loans are funded on a DVP (Delivery vs. Payment) basis, which varies from market to market. Both parties coordinate a delivery date with their respective brokerage firms or securities houses to fund the loan. The stock is transferred to the Lenders account simultaneously to the loan funds being transferred to the borrowers account. Block Trades are different where a Stock Purchase Agreement and Escrow Company are involved.  The pre-determined price is determined beforehand and on the secrow instructions.

What is the minimum liquidity required for a stock to qualify for a loan?

Liquidity is relative to the size of the block of stock.  Generally speaking the loan will be divided into several tranches, each tranche not to exceed 3-10 days average volume.

What are the costs involved with the loan programs?

There are no hidden costs such as application fees, appraisal fees, or any other upfront costs. In the event that a broker or middleman is involved any fees due can paid at the time of funding from the loan proceeds.

Our Typical Loan Process

Step 1) Quote is provided by detailed Term Sheet

Step 2) Borrower reviews and signs the Term Sheet

Step 3) Borrower provides copy of Brokerage Statement

Step 4) Borrower fills out the KYC (Know Your Customer) form

Step 5) Lender verifies securities ownership (if necessary)

Step 6) Lender prepares and submits loan documents

Step 7) Loan documents are signed & notarized by borrower

Step 8) Borrower transfers shares to Lenders custodian account

Step 9) Share transfer is confirmed & verified

Step 10) Loan is funded in accordance with loan documents

* Terms, steps and conditions are subject to change due to country, applicable laws, stock and local customs

Why work with us?

Numerian Capital works with borrowers to structure capital that will fit their investment goals and guidelines. We understand the complexity in todays markets and provide solutions to help navigate all horizons. Our most common product provides short term financing for customers that have a special project or need. A small firm might need working capital to fulfill a large order, Numerian Capital can help and can close that transaction in days versus months or weeks. A large shareholder may need liquidity to buy his dream home for his family, We are not a large commercial bank requiring pages and pages of paperwork and guarantees. Our analysts evaluate your collateral and make a decision in hours.

How do I start the process?
The first thing to do is to fill out an Indication of Interest (IOI) on our preliminary intake form HERE and one of our Business Development specialists will review it and get back with you ASAP.  If you wish to be contacted immediately, please put “Call Me Now” in the message field with all of your current contact information.

 

 

What is your Loan Minimum and Maximum amount?

The minimum loan amount is $100,000 USD the maximum is $25 Million USD. In special cases we can go higher depending on the liquidity of the stock and collateral

What are the interest charges and how are they paid?

Currently interest rates range from 4% – 12% depending on the liquidity and risk involved and are generally paid quarterly, semi-annually or a balloon payment however other payment options are available.

Can I get some help?

You are never alone! You work privately and exclusively with one of our experienced partners or traders straight through settlement. Regardless of your trading experience, we are available to hold your hand through closing.

Are you just in the United States?

Absolutely Not! We have a broad network of brokers and counterparties around the world that work around the clock. We have agents that speak fluent Chinese, Cantonese, German, Spanish, Arabic, Portuguese, Swedish, Italian and French. We are opening new offices in Hong Kong, Switzerland and London in 2019.

What Exchanges do you lend on?
  • Australian Securities Exchange [ASX]
  • BM&F Bovespa [BOVESPA]
  • Bolsa de Valores de Colombia [BVC]
  • Bursa Malaysia [KLSE]
  • Canadian Securities Exchange [CSE]
  • Canadian National Stock Exchange [CNSX]
  • Frankfurt Stock Exchange [FWB]
  • Over the Counter Exchange [OTCQX]
  • Nasdaq Stock Exchange [NASDAQ]
  • Hong Kong Stock Exchange [HKEX]
  • Indonesia Stock Exchange [IDX]
  • London Stock Exchange [LSE]
  • Mexican Stock Exchange [BMV]
  • Moscow Interbank Currency Exchange [MICEX]
  • New Zealand Exchange Limited [NZX]
  • Singapore Exchange [SGX]
  • Stock Exchange of Thailand [SET]
  • Taiwan Stock Exchange [TSEC]
  • Tel Aviv Stock Exchange [TASE]
  • The Russian Trading System [RTS]
  • Tokyo Stock Exchange [TSE]
  • Toronto Stock Exchange [TSX]
  • All European Exchanges
I'm confused and don't know where to start, can someone contact me?

Yes! The best thing to do is to fill out the EASY INTAKE FORM form HERE and tell us exactly what you need. We usually respond within the hour depending on the time.