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Best Banks for Loans on/for Shares
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VituVingiSana
#1 Posted : Monday, November 15, 2010 8:12:16 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
I have been searching for various options but I would like to know more. This is the info I have but please share if you know of better options or information that I have missed.

Please note that either I have a 'personal' relationship that eases the process but NOT the documentation! I have not tried others coz I don't know the process or folks there. I skipped the larger banks.

Flexibility: The range & type of shares they will accept. Some banks accept ONLY liquid shares & even then only 'blue-chips' whereas others will accept a good mix but at different LTVs e.g. low(er) LTV for illiquid shares.


Chase

LTV: 60%
Rate: 15% pa
Commitment Fee: 1%
Length: 15 months
Other: Trade through Genghis. Small bank so easy to navigate.
Flexibility: 4/5


I&M

LTV: 50%
Rate: 14% pa
Commitment Fee: 1%
Length: 15 months
Other: Custody Fees or Liens. Minimum loan/portfolio has to be 5mn.
Flexibility: 4/5


CFC Stanbic

LTV: 50%
Rate: 15% pa
Commitment Fee: 2%
Length: 15 months
Other: Crazy fees & conditions! Seems the bank & CSFS are 'different' firms!
Flexibility: 2/5


Equity

LTV: 50%
Rate: 18% pa [Not straightforward!]
Commitment Fee: 2% [initial 3%]
Length: 15 months
Other: Careful! They are fast but I worry about the fees! I wonder if I have to use EIB for trades?
Flexibility: 3/5


Giro

LTV: 50%
Rate: 14% pa
Commitment Fee: 1% [intial 2%] per annum
Length: 15-18 months
Other: Very small bank so easy to get answers.
Flexibility: 4/5
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Monday, November 15, 2010 8:34 PM | Reason: Not specified
BGL
#2 Posted : Monday, November 15, 2010 8:43:54 PM
Rank: Veteran

Joined: 10/11/2009
Posts: 1,223
CBA.

Lending & Financing Product: Share Secured Personal Loan
Purpose of Loan: Personal Financial needs.
Minimum Loan Amount: Ksh100,000
Maximum Loan Amount: 65% of the value of NSE quoted shares
Facility Fee: One off 1% of loan amount minimum of Kshs 2,500.00
Repayment Period: Up to 36 months
Percentage of Financing: 65%
Security: NSE quoted shares
History will not remember you for your IQ. It will remember you for what you did. “Genius is 1 percent inspiration, 99 percent perspiration.” Thomas Edison
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VituVingiSana
#3 Posted : Monday, November 15, 2010 8:45:29 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
BGL wrote:
CBA.

Lending & Financing Product: Share Secured Personal Loan
Purpose of Loan: Personal Financial needs.
Minimum Loan Amount: Ksh100,000
Maximum Loan Amount: 65% of the value of NSE quoted shares
Facility Fee: One off 1% of loan amount minimum of Kshs 2,500.00
Repayment Period: Up to 36 months
Percentage of Financing: 65%
Security: NSE quoted shares
Can you please find out the rates + fees. Thanks!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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My 2 cents
#4 Posted : Tuesday, November 16, 2010 9:02:53 AM
Rank: Veteran

Joined: 6/2/2010
Posts: 1,090
@VVS please let your many followers know that borrowing to purchase shares should come with a caveat.
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The Merchant
#5 Posted : Tuesday, November 16, 2010 9:34:38 AM
Rank: Veteran

Joined: 5/24/2010
Posts: 846
Location: KENYA
My 2 cents wrote:
@VVS please let your many followers know that borrowing to purchase shares should come with a caveat.

Is he borrowing to purchase shares or using shares to borrow? I think I understood it as the latter.
@vvs...go for I&M bank. They never surprise you.
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VituVingiSana
#6 Posted : Tuesday, November 16, 2010 10:00:27 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
The Merchant wrote:
My 2 cents wrote:
@VVS please let your many followers know that borrowing to purchase shares should come with a caveat.

Is he borrowing to purchase shares or using shares to borrow? I think I understood it as the latter.
@vvs...go for I&M bank. They never surprise you.

Both. Borrowing against existing shares to buy 'new' shares.

*** There are huge risks to borrowing.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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The Merchant
#7 Posted : Tuesday, November 16, 2010 10:04:57 AM
Rank: Veteran

Joined: 5/24/2010
Posts: 846
Location: KENYA
VituVingiSana wrote:
The Merchant wrote:
My 2 cents wrote:
@VVS please let your many followers know that borrowing to purchase shares should come with a caveat.

Is he borrowing to purchase shares or using shares to borrow? I think I understood it as the latter.
@vvs...go for I&M bank. They never surprise you.

Both. Borrowing against existing shares to buy 'new' shares.

*** There are huge risks to borrowing.

Wow! Leveraged trading right there. Your strategy must be superbly sound. Admirable!Applause
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Wa_ithaka
#8 Posted : Tuesday, November 16, 2010 12:09:20 PM
Rank: Veteran

Joined: 1/7/2010
Posts: 1,279
Location: nbi
Its called the pocket now, cry later strategy.
All da best
The Governor of Nyeri - 2017
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VituVingiSana
#9 Posted : Tuesday, November 16, 2010 12:21:03 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
The Merchant wrote:
VituVingiSana wrote:
The Merchant wrote:
My 2 cents wrote:
@VVS please let your many followers know that borrowing to purchase shares should come with a caveat.

Is he borrowing to purchase shares or using shares to borrow? I think I understood it as the latter.
@vvs...go for I&M bank. They never surprise you.

Both. Borrowing against existing shares to buy 'new' shares.

*** There are huge risks to borrowing.

Wow! Leveraged trading right there. Your strategy must be superbly sound. Admirable!Applause
No. I am 'trying out' banks to be ready for KPLC's large Rights Offer. The 40% Rights + Purchased Rights &/or Additional Shares means I need cash!
[I am not selling any of my current shares. That might have been a better idea but I am conservative & also think D&B will flip the Rights to a few Institutions leaving Retail Investors with very few shares/Rights]
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Tuesday, November 16, 2010 12:23 PM | Reason: Not specified
My 2 cents
#10 Posted : Tuesday, November 16, 2010 12:23:55 PM
Rank: Veteran

Joined: 6/2/2010
Posts: 1,090
And then what if you don't get all the rights applied for? Do you return the excess cash to the bank?
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