Topic: Discovering Ways to Leverage Non-Traditional Credit for Complex Lending Needs and Reducing Long Term Capital Gains 

Topic for meeting will cover solutions for complex lending needs using custom credit to increase liquidity, manage strategic goals for privately held businesses, improve tax efficiency, and assist in planning for long term capital gains exposure. Additionally, cover purpose of direct indexing and how they can assist business owners and others with potential long term taxable gains to eliminate them or significantly mitigate them with appropriate planning. Also cover securities-based lending to access liquidity for highly appreciated securities for both business owners and individuals. 

Speaker:  Brian Singsank, Senior Lead Wealth Custom Lending Specialist Wells Fargo 

He will cover custom credit leverage non-traditional credit for privately held business, private equity, family offices, and those that want to leverage highly appreciated or illiquid assets. For example, Employee Stock Ownership Plan (ESOP) Monetization Loans for the business owner looking to establish an ESOP as part of transitioning out of the business and getting liquidity out of the business for greater diversification. Also, customized alternative lending using alternative assets for private equity. For example, lines of credit secured by their LP interests help those that are Limited Partners achieve a variety of investment goals and leveraging assets that are otherwise tied up. LPs may want or need access to liquidity before the investment is sold. A line of credit secured by the LP investments in a fund provides that liquidity. LPs may need access to capital to invest in other funds through custom credit solutions or provide greater liquidity. Life insurance premium financing with custom credit for business owners and those with estates of more than $15 million for an individual and more than $30 million as a married couple. Wealthy clients and Family Offices often hold wealth in concentrated or restricted publicly traded stock that the client cannot or chooses not to sell. Investments can include large, concentrated positions,  stock with restrictions (including Rule 144 and post IPO), or operating units (OPUs) such as REIT OPUs. Quite often, a sale could trigger capital gains taxes or other penalties. Custom credit can provide a client access to this capital without triggering capital gains or penalties. 

Jared Skurla, Vice President Goldman Sachs

He will cover direct indexing tax loss harvesting. Goldman Sachs was one of the early pioneers of this. Business Owners that foresee a large capital event in the future (e.g., selling a business), direct indexing may allow them to invest cash to track an index while accumulating losses in the years leading up to the large capital event. This can also include capital gains from real estate both residential and commercial. For executives that hold large concentrations of their company stock that is highly appreciated that has performed well over the years with a low-cost basis, by combining that stock and cash into direct indexing, over time, losses can be captured to offset some of the gains in selling the low-cost basis appreciated stock to get greater diversification. 

Brendan Rodden, Senior Financial Advisor, Wells Fargo

He will cover securities-based borrowing allowing for tax payments, real estate financing, debt consolidation, education expenses, business financing, and luxury purchases such as a boat, jewelry, or fine art. Convenient access to cash, while allowing individuals and businesses to avoid a securities sale for liquidity and potentially defer any resulting capital gains taxes on assets that have a very low cost basis making them fairly illiquid due to potential capital gains tax. Securities-based credit line typically comes at a more attractive interest rate than an unsecured loan or a loan against less liquid collateral assets. May allow liquidity to jump-start a new business venture or provide the liquidity for short term financing. Securities based lending offers significant tax advantages because the loan enables investors to avoid selling assets and triggering capital gains taxes on the sale. In addition, if the loan is used for business or investment purposes, the interest payments may also be deductible. Borrowers should always consult with a tax professional in advance to assess the ramifications of their specific situation.

Agenda 

6:00 to 6:30 pm – Open Networking 

6:30 to 6:45 pm – Welcome, thank our host, up-coming events, and general comments. 

6:45 to 7:45 pm – The speakers will talk for 45 minutes to an hour saving time for questions.

7:45 to 8:00 pm – Open networking