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Margin Loans Private Company Margin Loan

Discussion in 'Finance & Banking' started by srmccar, 3rd Apr, 2009.

  1. srmccar

    srmccar New Member

    Joined:
    3rd Apr, 2009
    Posts:
    1
    Location:
    Brisbane, QLD
    Is anyone aware of a bank or institution that offers margin loans on private companies that are not listed on the ASX. The company is Australian based soley owned by about 1000 of it's 7000 employees and has been about for over 40 years. I have a substatial amount of funds (shares) tied to my home loan and would like to free up the equity in my house. Please let me know if you are aware of any.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    None of the regular margin lenders will offer margin on an unlisted company - it is too risky for them as there is not likely to be enough liquidity for them to be able to sell out if the value of the shares drop below their limits.

    Similarly, without a ready liquid market to use to value the shares, there is no way of them knowing how much they should be lending against the shares.

    I believe that some lenders like Tricom and Opes Prime did offer mortgages over unlisted securities - but they also ran into a lot of problems with their risky lending practices and have since gone out of business.

    Good luck - and please let us know how you go ... I would be interested to know what sort of deals lenders are offering these days.