Archive for Stock Based Loan

Differences between Margin and Stock-Based Loans; Equity First Holdings

Equity First Holdings has undoubtedly experienced growth in the number of clients interested in margins and stock-based loans. This may be due to the fact that, other loan lending institutions such as banks have increased their interests’ rates and also tightened the loan lending criteria such that a majority of clients do not measure up, hence making them seek alternative solutions.

 

According to an observation by Equity First Holdings , customers still find both margin and stock-based loans synonymous; since both forms use security as collateral. Here is a clear contrast featuring margin loans and stock-based loans:

Margin Loans

  • The client should be pre-qualified for the loan.
  • It may require money borrowed to be applied as specified.
  • Its interest rates are variable from time to time.
  • Its loan to value ratio is between ten and fifty percent.
  • In the case of a margin call, the lending firm reserves the right to liquidate the borrower’s collateral without warning.

Stock-Based Loans

  • Money borrowed can be applied wherever the client chooses; there are no restrictions.
  • Even when the stock value depreciates, the client holds the right to walk away at any given time.
  • Its fixed interest rate is between 3% and 4%.
  • Its loan to value ratio is between 50% and 75%

 

It has also noted that clients are hesitant when it comes to stock-based loans because, in the past, most lenders have failed to meet their expectations by dumping collateral into the open market and failing to honor stock pledges after maturity. The institution assures its clients that this is not the case anymore and encourages them to consider this type of loan.

About Equity First Holdings

It was founded by Al Christy Jr. in the year 2002. EFH is an alternative finance-lending firm that is reputable for offering clients low fixed interest rates for high loan to values and providing capital against a publicly traded stock. Currently, it prides itself in performing over 650 transactions worth more than $1.4 billion.

 

Its current locations include London, Hong Kong, Singapore and Australia. To find about more about Equity First Holding, visit its website http://www.equitiesfirst.com