Equities First Holdings is a worldwide leader and lender in alternative shareholder financing solutions. As financial institutions such as banks continue to tighten their lending criteria, an alternative attractive way to raise capital based on stock loans is being offered to investors. They are starting to discover more traction in stock-based loans in an economic situation where other competitors are tightening up. Debtors who need quick capital or do not qualify for credit based loans are turning to the system. Such people have options at margin based loans but have the disadvantage of increased interest rates.
Al Christy, the Chief Executive Officer and founder of Equities First Holdings, says that collateralized loans by stocks are an innovative and inventive way of people and institutions seeking working capital. This system has a greater loan to value ratio compared to margin loans but offers a fixed interest rate hence a calming certainty throughout the transaction.
Christy continued that in a typical two-year-old loan term, although there will be a lot of market fluctuations, stock-based loans is a better solution since it reduces the investment risk. The investor can also activate the non-recourse feature which allows him/her to walk away from the loan at any instant.
Many people think that stock-based loans and margin loans are the same since they use securities like collaterals but there are a lot of differences. Margin loans require the creditor to be pre-qualified and need the money for a certain purpose. The interest range of the loan varies between ten to fifteen percent of most banks and they can easily liquidate the collateral without prior warning. Stock-based loans have a fixed rate of between three to four percent and a loan to value ratio of around sixty percent. Stock-based loans have no restrictions on the purpose of the loan and are non-recourse hence the borrower can go with the money with no obligation.
Equities First Holdings was created in 2002 and offers capital which goes against shares operated on public exchanges platforms all over the world. The company has so far done in excess of six hundred and fifty transactions.