Most Premium Finance loans use US Dollar Libor as the underlying rate, with a spread above LIBOR for the all-in rate to the borrower.
In addition to US Dollar LIBOR based loans, Tax Efficient Solutions has access to use Swiss Franc LIBOR rates.
While one-month US Dollar LIBOR is positive, one-month Swiss Franc LIBOR is currently negative (-0.72% as of April 29, 2020), we can’t have a negative LIBOR rate in the loan, so the effective LIBOR rate is a 0.00% floor. The all-in rate paid on the loan is then only the spread above LIBOR, currently, 1.50%.
Advance Rate: We provide an advance rate of 90% on the cash surrender value on foreign currency loans.
When it comes to safe haven assets, investors often think of the US Dollar, US Treasuries, and gold.
Clients have the ability to open up a bank account and convert US Dollars (USD) to Swiss Francs (CHF), to further diversify their safe haven assets.
To be clear, these are not bank accounts in Switzerland. These are bank accounts in the US where the client has the ability to hold currencies other than the US Dollar.
Contact us today for more information.
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