In these modern times, we have seen tightened lending criteria from banks and other lending institutions. Equities lending, on the other hand, has come as an aid to those people who need to borrow capital and cannot qualify the standards set by banks. Banks have made borrowing difficult by implementing one of the following criteria; First, banks have increased interest rates for people wishing to borrow and don’t qualify. Second, banks have tightened loan qualifications. Finally, one needs security to acquire a loan. Equities First Holdings has designed an innovative way of giving borrowers the fund they need. They offer loan that is collateralized by stocks.
One advantage of this kind of a loan is that it offers a higher loan-to-value ratio compared to margin loans. Secondly, it offers a constant interest rate, therefore, ensuring the borrower has certainty during the whole period of the transaction. For instance, consider a three-year loan term. During this time, market fluctuation will occur. The good thing about stock-based loans is that the investment risk will be lowered to the downside market. Both margin loans and stock-based loans have differences and similarities as they require securities for collateral. On the other hand, for margin loans, you must be pre-qualified, and the loan may require you to use the money for a specific purpose. When it come to the interests rates, they may vary, and loan to value ratios may be between 10-50 percent. Additionally, the lending firm has an option to liquidate any collateral without warning. The good thing about stock-based loans is that they have no restrictions and have a lower interest rate of around three to four percent. Loan to value ratios ranges between 50-75 percent. Another good thing about this loans is that they are non-recourse, meaning that the borrowers can walk away without obligation.
Equities First Holding is a company that specializes in alternative finance solutions for its customers. The company does this by using publicly traded stock as security. The company was established in 2002. Over the years, the company has conducted around 650 transactions with a net value of $1.4.
Equities First holding has offices in nine countries. Some of its well-known subsidiaries include Equities First London; Equities First Holdings Singapore limited as well as Equities First Holdings Australia and Hong Kong.