$6.5 Million, Cryptocurrency-backed Loan For An Ultra High-Net-Worth Individual
4th September 2023
Key Details:
- US Resident/National
- Net worth: Over $20 million
- Financing requirements: $6.5 Million
- Terms offered: 65% LTV
In this case, we assisted an Ultra-High-Net-Worth individual secure a non-recourse, single stock crypto loan on their holding of Bitcoin for further investment opportunities.
The client is an entrepreneur having built their wealth with early investments in Bitcoin and stocks on the NASDAQ. Their wealth is predominantly held in real estate and Bitcoin. A classic case of a single stock loan but this time a digital asset class.
Cryptocurrency-backed lending allows Professional Investors to secure loans against mainstream digital assets, primarily Bitcoin, Ethereum, Litecoin and Bitcoin Cash. Loan proceeds can be used for any purchase. Typical uses including buying further crypto assets, diversification, and property purchases. Again, these loans are non-recourse, meaning that the only collateral provided is the cryptocurrency. No personal guarantees or security over other assets required. If the Borrower choses to walk away from the loan (e.g., if there is a substantial drop in value of the coin) they keep the loan proceeds, and the lenders keep the collateral with no further recourse to the Borrower. As an advantage, the Borrower receives all upside appreciation of the crypto assets at maturity. In addition, we have lenders that can offer unique call/put options to help mitigate the volatility of the asset class.
Here, Enness were able to assist a client looking to utilise the loan proceeds for further investment opportunities.
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