According to an Indianapolis news commentary article published on July 12, 2016, Equities First Holdings’ margin loans transactions have increased drastically. They involve using stocks as collateral in the trade market where banks and other financial institutions have a strict lending procedure. According to the news article, borrowers in need of quick financial capital or do not qualify for conventional loans, Equities First Holdings’ lending option serves as an alternative funding.
Although financial institutions have different lending options, banks have narrowed down their lending options, tightened credit qualifications, and increased loan rates. According to the owner and chief executive officer of Equities First Holdings, Al Christy Jr, loans collateralized by stocks are an advanced borrowing option for borrowers looking for a quick startup capital.
Christy noted that in a general three-year loan term, the market fluctuation is inevitable. Although factual, stock-based loans offer a hedge since the borrower lowers the investment risks when the market is about to take a downturn. As noted, most stock-based loans contain a non-recourse element that permits the borrower to defect from a stock loan in any situation. The value of stock-based loans may depreciate, but the conditions allow the borrower to keep loan proceeds and not liable to paying the lender.
Furthermore, Christy Jr noted that most borrowers’ margin loans appeared to be similar to stock-based loans. However, the statement is not true because the collateral for both marginal and stock-based loans are different. A margin loan requires a borrower to have qualification in a conventional bank. Additionally, interest rates for margin loan range between 10% and 50%. Contrary, stock-based loans do not demand any formal qualification and its interest rate range between 50% and 75%.
About Equities First Holdings
Equities First Holdings provides practical solutions to enterprises and high-net-worth investors looking for quick startup capital. Equities First Holdings specializes in product development to provide affordable liquidity through transparent and up-to-date terms and conditions.
http://www.equitiesfirst.com/ for more information.