The consumer lending industry was one of the most impacted areas of the financial world following the economic collapse in the past decade. While getting a consumer loan without collateral is challenging, those that are willing to look beyond traditional lenders could still get the loan amount they need. One specialty finance company that provides affordable consumer loans today is Equities First.
Equities First is specialty lending and finance provider that has already given over $1 billion in loans across the globe. They currently have offices and lending authority in North America, Europe, Africa, Asia, and Australia. The company specializes in providing stock-secured loans, which allows a consumer to liquidate their stock portfolio without actually selling the stock. In this loan structure, the lender will take a preferred lien on the stock portfolio. This then allows them to sell the stock to pay off the loan balance if the loan goes into default.
Since the lender has a very secure form of collateral they are able to offer a lower expense structure. Equities First is often able to provide loans that have interest rates in line with cash-secured loans, which helps to make them a very affordable and beneficial option for borrowers.
While it may not seem to make sense to pay interest on a stock-secured loan, there are many situations when taking out one of these loans would be a good idea. In general, if you believe that the stock is going to appreciate in value in the future, or you will receive dividend income, it would make financial sense to keep the stock and take out a loan instead. In a lot of situations, you would also benefit from a tax perspective if you were to wait to sell and avoid higher capital gains taxes.
Categories: Financial Firm, Financial Services