I n t e l l i g e n t A l t e r n a t i v e s

Expanding Your Business

What is the Intelligent Alternative?

Behind the Numbers:

It is the opportunity to expand your business with interest-only repayment while still retaining participation in your stock portfolio using an Intelligent Alternative HedgeLoan®.


John Shareholder owns a farm with a 10% interest note that collateralized by all of his equipment and most of his other farm assets. He needs expansion capital and owns 100,000 shares of the stock XYZ worth $10 a share, but he expects good news this year that will boost the stock's price and doesn't want to liquidate.


Solution: With a HedgeLoan @ 6.99% interest fixed, he can refinance the farm, get the capital to grow the business and remove the liens from all other assets. If his favorite stock goes up, he can participate in the upside, and if it goes down, he can exercise his right to default on the loan (with no reporting to credit bureaus) and the collateral stocks acting as full satisfaction of the HedgeLoan obligation.

The good news? Either way, he keeps the capital he needed for expanding his farm.

Example

Note on farm : $500,000 @ 10% interest. Working capital requirement: $200,000. Total needed: $700,000.

Proceeds from 75% LTV HedgeLoan of $1MM of the stock XYZ: $750,000.

He saves $15,000 per year in interest expense on the existing $500,000 note on the farm. He can invest $200,000 in new land, supplies, etc.

He can participate in upside of stock if it appreciates, and freely exercise the default option if it depreciates.

In addition, he can go to the bank to get financing if he needs it in the future because all of his assets would now be free and clear. And the remaining $50,000? Perhaps a new tractor for the farm, or a new car for the spouse?

Call me Traci Gregory 770.333.4404,
Authorized HedgeLender Agent

or send me an email - traci@tracigregory.com

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