In today’s dynamic financial marketplace, people in need of capital have access to numerous financing options. Even those with poor credit history or in need of urgent funds can utilize their shares as collateral to acquire loans at competitive rates. Equities First Holdings is a powerhouse when it comes to loans that are collateralize by stocks. Loans collateralize by stock include share-based lending and margin lending. The similarity of these two lending options is that they allow individuals and firms to utilize stock as collateral.
The loan-to-value ratios of stock-based lending are approximately 75 percent while for margin loans the ratios are from 20 percent to 50 percent. Borrowers of margin loans may be instructed to use the money obtained for a particular purpose. On the other hand, stock-based loans are non-purpose, implying that the proceeds can be utilized for any reason. The interest rates for traditional margin loans tend to vary while those of stock-based ones are fixed.
Advantages of stock-based loans
- A hedge against market fluctuation
Taking share-based loans offer a chance for investors to navigate through tough market fluctuations. This loan allows the borrower to minimize his or her risk in a declining market.
- Non-recourse feature
The non-recourse aspect associated with stock-based loans enables a borrower to abandon a share loan any time she or he wishes. Even when the share’s value declines, the borrower will comfortably retain the initial loan proceeds.
Equities First Holdings
Equities First Holdings (EFH) delivers innovative solutions to executive and affluent individuals in need of non-purpose capital. The firm concentrated on developing a product that supplies ample liquidity at flexible terms via a safe and transparent process. Its novel approach to stock-based loans has resulted in over 635 successful transactions to date. The company’s unique method of financing offers many of its customers with a lower cost of capital and ideal financing terms compared to the conventional financial alternatives.
EFH operate internationally via regional offices in Hong Kong, South Africa, London, Bangkok, Sydney, Singapore, and Perth. It provides financial arrangements customized to suit the needs of borrowers. EFH specializes in capital allocation, alternative finance solutions, as well as financial services. The Indianapolis-headquartered lending heavyweight opened its doors back in 2002. In 2013, the company released a statement to its clients, announcing a double-digit growth and global expansion. EFH has been experiencing a 30 percent annual rate of growth since its establishment over 15 years ago.