Stock as Collateral More Popular When Seeking Capital, Equities First Holdings Finds

As banks continue to limit access to working capital through loan qualifications, borrowers are becoming more clever in how they get around this hurdle. In seeking ways to boost investments and pursue business interests, some investment firms are noticing a creative trend emerging.

Al Christy, Founder and CEO of Equities First Holdings (EFH) has seen stocks become more attractive to borrowers as collateral when going about securing capital. Through stock-based loans borrowers have found that they have an increased probability for returns and lower risk throughout a transaction than other methods of borrowing.

One of the biggest advantages, Christy has pointed out, is the sharp decline in risk through stock-based loans. This class of loan entitles the borrower to a degree of freedom by allowing them to leave any given stock despite depreciation, allowing them to continue with the loan without maintaining obligation to the lender. This also means that the borrower isn’t beholden to restrictions the lender may wish to impose on the capital, meaning they have no say in how it is eventually spent. Add to that fixed interest rates with a loan-to-value ratio of 50:75 and it’s easy to see why stock-based loans are quickly increasing in popularity.

According to Christy, lenders with predatory practices may have intentionally overlooked these options for their partners in the past, placing a borrower’s collateral into open markets and failing to return stocks at the end of a transaction. But at EFH, stock-based borrowing is an option that’s being explored with more regularity due to its diminished risk and increased reward and more information click here.

About Equities First Holdings:

Since 2002 Equities First Holdings has made sense of the dynamic world of business and investment by operating in disparate markets all over the world. Meeting challenging requests from valued clients in Hong Kong, London, Australia, or any of their offices around the world, Equities First Holdings has managed to generate returns to their clients in excess of $1.4 billion.

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