Equities First Holdings (EFH), a leading global lender and provider of alternative shareholder financing solutions, is noticing growing traction in margin loans and stock-based loans in an economic climate where financial institutions have tightened lending criteria. Equities lending is becoming a worthy alternative for borrowers who either do not qualify for more conventional credit-based loans or need to raise capital quickly.
Recently, several banks have reduced their lending options, increased interest rates, and tightened credit qualifications, though some options still exist for borrowers. The Founder and CEO of Equities First Holdings Al Christy, Jr. finds that loans collateralized by stocks are an innovative borrowing alternative for people hunting for working capital. Stock-based loans characteristically provide certainty throughout the life of the transaction as they offer a fixed interest rate and have a higher loan-to-value ratio than margin loans.
Christy notes that stock-based loans provide a hedge during a typical three-year loan term since the borrower is reducing his or her investment risk in a downside market, though market fluctuation is inevitable. The executive also adds that most of these loans have non-recourse a feature that permits an individual to walk away from the loan at any point so the borrower can keep the initial loan earnings with no additional obligation to the lender. Borrowers of stock-based loans can anticipate a fixed rate between three and four percent in addition to loan-to-value ratios ranging from 50 to 75 percent. With a marginal credit, the individual can expect loan-to-value ratios between 10 and 15 percent. Besides, in case of a margin call, the lending firm can liquidate the borrowers’ collateral without warning.
About Equities First Holdings
Equities First Holdings is a global company that provides securities based lending services for investors. The lending firm offers loans based on their evaluation of the risk and future performance associated with treasures, bonds, and stocks.
EFH was founded in 2002 and has completed over 650 transactions worth over $1.4 billion to date. The Indianapolis-based company has offices in nine countries, including London, Bangkok, Sydney, Perth, and Hong Kong. Through the company’s simple processes, borrowers can use publicly traded shares as collateral and gain fast access to liquidity at below-market rates.