Alternative lending has been an increasingly popular option for businesses and high net worth individuals who require quick access to sufficient capital. Equities First Holdings is one of the leaders in alternative capital in Australia and around the world. Alternative lending works similar to the traditional lending process, but without the long waiting period that is common for most banks.
The way it typically works is through a stock based loan. Stock based loans work by the borrowing putting up a portion of their stock holdings as collateral for the loan. This little known option opens the door for many businesses and individuals that were previously inaccessible through traditional lending methods. An individual with a great stock portfolio could technically use it as collateral to secure a loan that allowed them to open a business or put a down payment on a house instead of having to sell off parts of their portfolio for the cash.
EFH offers alternative lending process with rates comparable to those found in traditional bank loans, and sometimes even better. Stock based loans typically a standard three to five year repayment plan. This allows the borrower to lock in an average fixed interest rate between three and four percent. Once all is said and done, borrowers end up with an average loan to value ratio somewhere between 50-75%.
There are also some direct benefits from stock based loans and alternative lending that are not available the traditional way. For example, stock based loans are eligible for non recourse plans that allow borrowers to walk away from the loan whenever they wish, even if the stock’s value goes down. Upon walking away the borrower is able to keep what they received from the loan with sometimes no obligation to the lender to learn more: https://www.theloop.com.au/ponydesignco/portfolio/equities-first/257479 click here.
EFH has specialized in alternative lending since 2002. Since then EFH has facilitated $1.4 billion in loans in only 700 transactions. EFH recently moved their offices to the heart of Melbourne in order to help more clients reach achieve their financial dreams.