Over the past decade the credit markets across the globe have continued to rebound and become less restrictive. However, some areas of lending are still challenging. One of these areas is in the form of providing unsecured personal loans. While getting an unsecured personal loan is still hard to come by, there are still some alternatives that people can use to obtain a personal loan.
One type of loan that is still provided by some specialty lenders are stock-secured loans. A stock-secured loan is a personal loan in which a consumer will be able to pledge a stock portfolio, or other liquid security, as collateral. The lender will then be able to provide financing of close to 100% of the stock. In the event that the loan goes into default, the lender will then have the ability to liquidate the stock to pay off the loan.
One provider of stock secured loans is Equities First. Overall, they have provided nearly $1 billion in loans to their borrowers and have a very low default and collection rate, which helps to protect their client’s stock portfolio.
There are several situations when taking out a stock secured loan from Equities First could be a good decision for a consumer. One situation is when a consumer wants to hold on to stock for tax or estate planning purposes. Selling stock can have a big tax consequence, especially if it is sold after a short period of time. Because of this, it is often more beneficial to take out a loan and pay interest than sell the stock and pay a higher tax rate.
Another situation is when selling the stock goes against the basic investment strategy. If you feel that there is a lot of near-term upside in the stock, it could make far more sense to hold the stock and take out a loan. Over the course of time, the appreciation and dividends paid by the stock will outweigh the interest.
Equities First Holdings, LLC (EFH) has provided different financing solutions since 2002. EFH is a global company with an office in Hong Kong, Singapore, and even Australia. This article will give an insight about Equities First Holdings, what they specialize in and who benefits from them.
Equities First specialize in developing efficient alternative lending solutions for businesses and high net-worth people looking for capital. The purpose of this company is security based lending, and their focus is on the global market. They first offer investors a straightforward transaction that helps them get funding quickly and effectively.
It’s a global leader in alternate shareholder financing. This firm mainly benefits those who need capital quickly or those who don’t qualify for more conservative credit based loans. EFH has been enabling clients to meet their objectives and goals because it supplies capital against a publicly traded stock.
How Equities First operate
They deal in offering a unique loan process that is simple, transparent and secure to their clients. First, an individual is required to contact them and include his personal details and his proposed insurance, the amount of money he needs as funding.
The second step includes the Equities determining the loan terms and calculate the interest rate needed. Once the client and Equities firm have agreed to the terms and have signed the agreement, they transfer the agreed upon collateral to an Equities First custodian account.The collateral and loan are transferred to the holding account simultaneously. Once the client is done paying the loan and interest, his indemnity is returned which shows that the Equities’ first holding are accountable and trustworthy.
To conclude, Equities First Holding deals in offering loans to their clients on low term interest rates. A client is expected to have collateral regarding business stock to cover the expenses if he or she is unable to pay the loan.