Ever thought of your stock assets being a basis for borrowing money? That’s a growing trend right now among investors as discovered by Equities First Holdings LLC. So what are the advantages of stock-based loans over conventional loans?
In the current economic climate, banks and other lending institutions are tightening the grip on their borrowing terms. This move has seen many potential borrowers affected and has led to the search for other alternatives. As Equities First Holdings reports, margin loans and stock-based loans seem to be the answer to accessing quick investing capital—and there are advantages to doing this.
First, stock-based loans have a much lower risk when the market is on the downside. Their loan-value ratio is also much higher compared to margin loans; 50% to 75% for stock-based loans and 10% to 50% for margin loans. The stock-based loans are non-recourse meaning the investor is not bound to the stock loan and can walk away from it when they wish.
Additionally, the criteria for qualification are more relaxed with a stock-based loan. The borrower is not subjected to an excruciating vetting process by the financial institution, neither are they asked to detail where the money will be used. So the borrower has everything to gain from using stock-based loans in accessing capital.
Then it’s a wonder why this form of borrowing hasn’t been a popular channel given the idea has existed for years. Well, previously there was a scandal where lenders used borrower’s stocks to invest in the market, and ran away from the aftermath when the market crashed. But today’s lending institutions have more integrity and transparency, a vital prerequisite for stock-based loans to flourish.
About Equities First
Equities First Holdings LLC is a global financial lender that doubles up as a financial researcher. The financial lender has been on the forefront of providing tailor-made loan solutions to their clients. They have also streamlined their lending process, meaning investors have a quicker access to loans with relaxed application rules.Visit their website http://www.equitiesfirst.com/
The financial lending institution has been in operation for 14 years and has handled thousands of loan transactions for borrowers. They also have offices in 9 different locations globally to reach as many people as possible in need of financial help.