Equities First Holding LLC specializes in efficient securities based lending services for businesses and high net-worth individuals. EFH provide loans based on the evaluation of the risk and future performance intrinsic in stocks, bonds, and treasuries. Their approach to funding provides their clients with a lower cost of capital and superior financing terms than more conventional financing alternatives. Banks have reduced lending options for borrowers, stiffened loan qualifications and heightened interest rates.
Al Christy, Jr., Founder, and CEO of Equities First Holdings believes this kind of stock-based lending as a viable and innovative borrowing alternative for individuals pursuing venture capital. He is quoted of saying “During a typical three-year loan term, market fluctuation is inevitable, but stock-based loans provide hedge because the borrower is lowering his or her investment risk in a downside market. Most stock-based loans have a non-recourse feature that allows a borrower to walk away from a stock from a stock loan at any point, even if the stock’s value depreciates. The borrower is able to keep the initial loan proceeds with no further obligation to the lender.”
Margin loans and stock-based loans are often considered to be synonymous. Both forms of financing use securities for collateral, but there are specific differences.
Often with margin loans, the borrower must qualify before hand, as with a traditional bank loan, and may be required to use the money for specific purposes. Usually, interest rates fluctuate and the borrower can assume a loan-to-value ratio of about 10 to 50 percent. Lending firms may also liquidate the borrower’s collateral without notice.
As for Stock-based loans, borrowers can anticipate fixed interest rates and a loan-to-value ratio of 50 to 75 percent. There are no restrictions on the loan like with margin loans. The borrower can spend the money on whatever they deem necessary.
This commitment to their clients puts EFH at the top of the list for potential financing options. Since 2002 they stand committed to providing a custom and honest transaction allowing the client to run operations on a deal by deal basis, with low risk and flexible qualifying criteria they have proven to be the standard for businesses and individuals alike.