Steve, you may technically be correct per the DTC, but somehow restricted shares can find their way out of a sock drawer and into the hands of shorts. Rather than believe me, read a couple of the examples below from those who are in that business.
http://www.dafusa.com/DAF/Pages/loanstock.html#RSF
Whether you need cash for personal or business purposes we can help you hedge your portfolio positions and gain access to capital resources through loans against Restricted 144 (see details below), Aged Affiliate or Free Trading securities.
Loans can be funded in as few as five business days and are available to insiders, affiliates and ...
http://www.thestockloanconsultant.com/index.p...e&id=5
TheStockLoanConsultant.com
The program is designed specifically for corporations, its employees, officers and major share holders of publicly traded companies, offering total financial privacy to our clients unlike selling shares.
One of our specialties is the micro cap stock market, which includes the OTC, and Pink Sheet listed companies , Stocks under $4 dollar US a share to literally one cent a share stock price. These stocks/companies typically find it hard or even impossible to get financing against their securities in the normal sense, bank, investment banking houses, etc. But we will lend against with the same advantageous terms a blue chip company (NASDQ or NYSE) . Our main underwriting criteria, is trading volume, as we like to say "volume is King"…
Our Securities Lending/Stock loan program is much more than a loan. It enables the borrower to receive significant liquidity from their securities portfolio. And since the loans are non-recourse (no personal or corporate financials required). There is no typical margin type call, as the call provision is much more advantageous to the borrower than a typical brokerage house margin loan, so in the event of market-downturn the borrower has more down-side protection. Also the borrower keeps most of the upside/appreciation in the securities during the loan term, unlike selling the shares where you would be out of the market, and unable to reap anymore upside potential in your stocks.
Attractive Terms: from two to three years terms with a pre-pay that can be structured after year two with a penalty.
Non-Resources: No Financial or credit checks required: High LTVs (Loan to Values) More cash out of your securities than banks or brokerage houses.
Market down-turned protection: As you are locking in you paper profit now, and taking cash out now that can be used for other investments or just personal use, if the market downturns you got your cash in a non-recourse environment.
Attractive Low Interest Rates: Typically 5% or lower, simple interest, interest only paid to the lender quarterly.
Walk away: the borrower can walk away at anytime and not make any more payments just forfeit the stock put up as collateral for the loan and owe nothing more.
