Equities First Holdings Experiences an Increase in Stock-Based and Margin Loans
Equities First Holdings (EFH) is the world’s leader in providing alternative financing for investors. Meanwhile, Equities First Holdings experiences more traction in stock-based and margin loans as financial institutions and banks tighten their lending criteria. Therefore, borrowers not qualified for conventional credit-based loans, Equities First Holdings serves as an alternative source of financing.
Although there are several options for such borrowers, recently, financial lending institutions have tightened credit qualifications, reduced their lending options, and increased interest rates. As pointed out by Al Christy, Jr., the owner and Chief Operating Officer of EFH, stock-based credits serve as an alternative borrowing option for investors seeking to raise quick capital. Loans collateralized by stocks usually yield high proceeds than marginal loans. Furthermore, their interest rates are fixed; thus, provides certainty even if the market fluctuates in the future.
Al Christy added that although market fluctuations are inevitable during a three-year credit term, loans collateralized by securities provide a hedge by lowering investment risk. Interestingly, these loans do not have a recourse feature allowing borrowers to abandon the loan at any time, even if the value of the securities depreciate. Some people consider securities-based and margin credits to be identical since they use securities for collateral. However, the two differs significantly. Like conventional bank loans, borrowers of margin loan must be pre-qualified. Moreover, borrowers may be required to use the borrowed funds for a specific purpose. Margin loans have variable interest rates, and loan-to-value ratio ranges between 10% and 50%. Additionally, in the event of a margin call, the loaning firm may liquidate the debtor’s security without warning.
Since its inception in 2002, EFH provides alternative financing solutions and trading stocks to help its clients to meet professional and financial needs. Currently, EFH has completed over 650 transactions amounting to over $1.4 billion.
EFH is a world-class lending institution functioning in nine countries. It provides stock-based financing services to corporations and individual investors. EFH offers alternative investment solutions based on its evaluation of the expected risk and performance of bonds and stock. EFH’s headquarters are located in Indianapolis, Indiana.