Leading provider of alternative financial solutions Equities First Holdings (EFH), recently announced that more debtors are choosing stock based loans over traditional loans. This trend has been growing steadily because commercial banks and other traditional lending institutions have tightened their lending criteria. Stock based loans have therefore, become popular among borrowers who are in need of quick capital, yet do not qualify for normal credit-based loans.
Whereas such individuals have a number of alternatives besides stock loans, a general increase in interest rates is greatly shrinking the available options. EFH’s CEO and founder Al Christy opines that collateralized stock-based loans are an innovative credit alternative for individuals who are looking for working capital. Generally, these loans offer borrowers more value because they have a fixed interest rate. Therefore, there is a degree of certainty in the course of the transaction period.
The Competitive Advantage of Stock Loans
Mr. Christy notes that stock loans are advantageous due to a lower investment risk in the event that there is a slump in the money markets. This is due to the fact that they have a fixed interest rate. They similarly have a non-alternative feature, which allows borrowers to opt out even when the value of the stocks depreciate. This way, borrowers can hold onto the original loans without having any further debt.
There are no loan restrictions when it comes to this type of credit. This means that borrowers can use their loans to undertake projects of their own without any constraints. Nevertheless, Al decries the fact that unscrupulous lenders are infiltrating the industry, and are unceremoniously dumping borrowers’ collateral. Therefore, he urges borrowers to be careful when seeking stock loans.
Equity First Holdings in Brief
The company has curved a niche for itself within the financial services industry through the provision of alternative financial solutions to its clients. Since its formation, it has managed to specialize in the development of efficient lending solutions, which mostly target entrepreneurs and affluent individuals who are seeking non-purpose capital.
For more information please visit http://www.equitiesfirst.com/