Member Loans
Types of Loans Available
InvestmentClubbing.com administered investment clubs are outfitted with the capability to provide various types of loans to the club members, secured by their shares of their club. These loans can serve several objectives:
- Share purchase contract – Your club can sell its shares to new members on a contract of sale. This allows the buyer to reserve their place in your club and build credit, while the club enjoys an increased stature.
- Share purchase loans – Your club lends you funds to buy shares of the club. Net interest earned from your loan is distributed to the members of the club, including the borrowing member, much like a ‘mini-credit union’. members utilize these loans to build credit without negative impact on their balance sheet.
- Share Draft Loans – Your club lends you funds against your shares. This is usually done to keep you from
having to liquidate the club shares for a temporary loan, and can only be done when the club has either the cash on hand, or has assets which the club agrees to monetize to make the loan. - Club portfolio loans – The club borrows against shares it holds so that it can facilitate a loan to a member. Such loans are non-recourse, and can be used for several purposes:
- Keep a member from having to liquidate his positions
- Generate the cash to buy out a liquidating member, without liquidating club positions
- Generate cash to purchase additional club holdings, hedging portfolio downside risk
Our investment clubs provide this capability in every case. Please contact us for more details.
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