Equities First Holdings, a global lender, is now seeing a new trend in their borrower’s behavior. That trend is showing borrowers are using their stocks as a way to boost their capital rather than applying for traditional loans. The economic climate has been volatile since 2007, and today that volatility continues to exist. The availability of these stock-based loans is great news for those who are seeking a way to pay off debt as well as to further invest in their business.
While Equities First works with businesses and high net worth individuals, these individuals are also looking for ways to increase their capital creatively. When banks began to tighten their guidelines on credit, and how it would be awarded, borrowers had to find a new way of doing things. The need to raise capital quickly rules out taking the time to apply for a conventional loan when the stocks can be accessed within a few days in most cases.
CEO Al Christy said this in a recent press release; “”During a typical three-year loan term, market fluctuation is inevitable, but stock-based loans provide a hedge because the borrower is lowering his or her investment risk in a downside market.” Risk taking is second nature for entrepreneurs, but when it comes to money it’s important that alternatives are considered for financing when needed. Margin loans bring an unknown to the equation because the borrower must be pre-qualified in order to get the loan. The stock-based loan does not require that, and in a down market it’s ideal for the borrower.
These loans make it simple for the borrower as they can use the money for any project they wish. The loan-to-value ratios can also be higher than in a conventional loan, which is also welcome news for those living in areas where real estate is still making a comeback.
Since 2002, EFH has been working with borrowers on investments, stocks, and now this alternative form of lending. The financing is done in an alternative fashion, meaning that the money is lent against publicly traded stocks. Since 2002, EFH has completed more than 650 transactions and they are valued at more than $1.4 billion.
Visit http://www.equitiesfirst.com/ for more information.