With the first changing global economy, banks and other lending institutions are increasingly reviewing their lending policies, most of them reducing the borrowing options for borrowers. In other cases, banks are opting to add more clauses to their lending policies, adding more loan qualification requirements and raising the interest rates. These banks aim at keeping conventional credit-based loans in check. Equities First Holdings, LLC (EFH) is, however, appearing to be swimming against the tide. The global lending firm introduced a lending option for its clients where they can use stock as loan collateral for a three years period. Consequently, EFH has in the recent past tightened its grip on margin loans and stock-based loans. According to the man behind this clever move, CEO Al Christy, stock-based loans will go a long way in assisting individuals in need of working capital and who do not meet the threshold for credit-based loans.
Benefits Associated With Stock-based Loans
Using stock as collateral has many advantages on the borrower’s side. Stock-based loans have a relatively higher LTV ratio of about 50 to 75 percent compared to that of margin loans which range between 10 and 50 percent. Secondly, unlike in margin loans where the borrower is required to specify the purpose for which the loan is intended, stock-based loans gives the borrower the freedom to use the loan for any purpose of their choice. Thirdly, if the stock value depreciates during a down-market, the pledged collateral is not affected. Additionally, with borrower’s shares used as loan collateral, investment risks involved during a down-market are minimal. Read More https://beta.companieshouse.gov.uk/company/08120457
About Equities First Holdings
EFH specializes in offering alternative shareholder financing solutions. Through their nine subsidiary offices, the firm gives capital to their clients against publicly traded stock around the world. BusinessWire News For EFH.
For the past 15 years, EFH has helped many people to achieve their goals, having done over 650 transactions. The firm is mostly respected for its honesty in their loan recovery process and their high LTV ratios.