Equities First Holdings is a world-class lending institution and provider of alternative capital financing. As financial institutions make their lending criteria tight, EFH’s margin loans, and stock-based loans increases. EFH serves as a substitute source of funding for borrowers limited to conventional credit-based loans and wishing to raise quick capital.
While there exist options for financing these borrowers, recently, lending institutions have reduced their lending options, increased interest rates, and tightened loan qualifications. As such, most borrowers prefer stock-based credits, as is an innovative credit option for investors in need of quick funding. These loans are often highly valued than margin loans and their interest rates remain fixed even during the market fluctuation.
According to Al Christy, the CEO of EFH, market changes are inevitable during extended loan terms. However, stock-based credits provide a hedge by lowering the expected investment risk when the market is about to make a downturn. Furthermore, securities-based credits are non-recourse; therefore, debtors retain loan proceeds, even if the value of the securities decline.
Difference between margin loans and stock-based loans
Although stock-based and margin loans are considered synonymous because of using securities for collateral, they differ significantly. Firstly, margin loans require applicants to have a pre-qualification. Their interest rates varies and may range from 10% to 50 %. Notably, a lending institution may liquidate the debtor’s security without notification.
Conversely, stock-based loans’ interest rate is fixed and ranges from 3% to 4% and a loan-to-value ratio ranging from 50% to 75%. Interestingly, for stock-based loans, borrowers are not restricted to use the money for a particular purpose.
About Equities First Holdings
For over 14 years, Equities First Holdings is a premier provider of unconventional financing solutions to investors not qualified for conventional loans. Borrowers use publicly traded bonds and stocks as their collateral. EFH provides excellent liquidation at a lower interest rate to help its clients meet their professional and personal financial needs.
As a global lending institution, EFH functions in nine countries in the U.S, Asia, Australia, and the U.K. Since 2002, EFH has initiated almost 700 transactions for international corporations and high-net-worth individuals. Through EFH, clients access alternative financing at lower rates using stocks and bonds as collateral.