Equities First Holdings has seen an increase in the number of stock-based loans and margin loans. The current economic climate explains the increasing number of borrowers because banks and lending institutions have come up with tightened lending criteria. Borrowers who want to raise capital quickly and those not qualifying for conventional loans are having difficulty accessing loans. However, all is not lost for them because they can get alternative loans. Equities First Holdings is offering margin loans and stock-based loans to such borrowers. The above loans are gaining popularity as alternative means of getting loans.
Most banks have increased their interest rates, cut their lending options and made loan qualifications tighter. That makes it hard for borrowers to access loans. However, Al Christy, the founder and chief executive officer of Equities First Holdings still thinks there is hope for borrowers. Christy sees stock-based loans as an alternative for people looking for working capital. However, Christy explains that margin loans and stock-based loans are not synonymous, a conception by most people. The two financing methods use securities as collateral; however, there are notable differences.
Differences between margin loans and stock-based loans
Individuals who want to borrow margin loans should be pre-qualified, just like in conventional bank loans. The individual may also require using the money for specified purposes. Interest rates of margin loans vary, and borrowers should expect loan-to-value ratios ranging between 10 and 50%. The lending firm has the authority to liquidate the collateral of a borrower without warning in case of a margin call.
Stock-based loans, on the other hand, have fixed interest rates between three to four percent. The loan does not have any restrictions; thus borrowers can sue the money for any purpose. Borrowers can walk away from a loan even with decreased stock value. Stock-based loans have a loan-to-value ratio of between 50 to 75%.
About Equities First Holdings
Equities First Holdings started its operations in 2002, and its headquarters are in Indianapolis, Indiana. It is a private lender that specializes in lending transactions that are securities based. The firm has enabled clients to access quick loans using their publicly traded shares as collateral.
The lending firm also has a satellite office in New York City. Equities First Holdings operates globally in nine countries. It has completed over 650 transactions worth over $1.4billion.
For more details please visit http://www.equitiesfirst.com/