The more informed you are about the lending process, the greater likelihood that we can successfully create a tailored solution to fit your funding needs.

Nobody likes going through a middleman. With EFH, you don’t have to. We’re a private lender, so we do our own underwriting and totally control the loan process. That gives us the freedom to make the process personalized to meet your needs.

Is stock the only asset I can use as collateral for a securities loan?
Although the term “stock loan” usually refers to a loan where stock is pledged as collateral, EFH also services individual investors with other types of investment assets, such as bonds or U.S. Treasuries. We assess each client’s desired collateral on a case-by-case basis, so please contact us to determine if your assets meet our requirements.

How does EFH set a “strike price” and determine a loan value?
Before a loan can be funded, a “strike price” (the per-share price that the value of the collateral will be based on) must be set. EFH uses a fair and equitable three-day average pricing model for every stock loan it transacts. The strike price is based on an average of the closing prices of the collateral for three consecutive market days, beginning with the day it is transferred to EFH.

Borrow funds by using bonds or U.S. Treasuries as collateral
Each of these types of securities will be underwritten by EFH on a case-by-case basis. If you have bonds or U.S. Treasuries that you would like EFH to consider as collateral, please contact EFH to receive a customized proposal.

What is the EFH loan process?
Since there is no middleman, we have the freedom to work directly with you and make your loan experience easy, fast, straightforward, and hassle-free. Here it is in five simple steps:

1. Contact EFH with complete details about the proposed collateral and the amount of nonpurpose funding needed. You may not use the proceeds of the loan to acquire any marginable securities.
   
   
2. Provide proof of ownership of your stocks, bonds, or options with either electronic or certificate documents. You must also be able to demonstrate that any stock is free-trading without restriction and that you are not a 10 percent or greater holder, director, or executive officer of the issuer.
   
   
3. EFH will first determine the viability of the loan and then calculate a loan-to-value ratio, or LTV, and the interest rate, based on an assessment of both short- and long-term risks.
   
   

4. You agree to terms, sign all contracts, arrange for your assets to be transferred to EFH, and make quarterly interest payments. EFH will sell some or all of the stock during the pendency of the loan.
   
   
5. At the end of the loan term, you repay the loan to EFH. Once your loan is repaid in full, EFH returns the same amount of pledged collateral to you.
   
   

How long does the process take?
Providing that all documentation of the proof of asset ownership is supplied promptly, contracts are signed, and transfers take place in a timely manner, funds can be deposited into your account in three to five days. EFH will work with you if you have an urgent need that requires more immediate attention and a fast-track timeline, such as a margin call or a business deal with a pressing deadline.

What happens during the loan term?

• You make quarterly interest payments to keep your loan current.



• EFH sells some or all of the stock position from the outset and during the term of the loan and before default.

What happens at the end of the loan term?
You pay the loan back, then EFH gives you back the same number of shares pledged as collateral.

However, depending on what your financial needs are at the time and how your collateral has performed during that period, there are a few other options:

• You can extend the term of the loan upon mutually agreed terms.
  
  
• In the event of portfolio growth, upon mutually agreed terms, you can refinance the loan at the end of the term.
  
  
• In the event of substantial decline in market value of your collateral, you can simply walk away from the loan with no additional expense because it is a nonrecourse loan.
  
  

What if my collateral drops in value, but I still want to get it back at the end of my loan term?
If the value falls below the agreed minimum value, that is a default under the loan terms. If you wish to ensure that you get your shares back despite a large drop in market value, we’ll work with you to help you get your loan out of default. That circumstance will require tendering additional shares or cash to keep the loan viable. However, remember that our loans are 100 percent nonrecourse, so you have the choice to walk away from the loan with no penalty at any time.