Having access to capital is a practical necessity for small business owners, and even individuals, that are looking to grow a business, purchase a home, or invest. While people and businesses used to be able to get the capital they needed from banks and other financial resources, credit markets have tightened considerably in the past year. Because of this, many people and businesses have had to look for different ways to raise the capital that they need.
One way that people are still able to qualify for the loans that they need is by taking out a margin loan, which can be secured by stock and other securities. In these loans, an individual or business that owns stock will be able to pledge the securities as collateral to a loan. The bank will then have the ability to liquidate the stock in the event that the loan is not repaid, which makes them more attractive to a lender as well.
While the lenders do have collateral, it also makes for a great loan option for a borrower as well. They are normally able to get lower interest rates and fees since a lower risk asset secures the loan. Further, they are able to gain the liquidity from the stock that they have without actually having to sell the stock. This can be beneficial as the stockowner will still be able to benefit from future appreciation and they will not have to suffer the tax consequences.
For those that are looking to take out a loan secure by their stock, a great place to get the loan would be through Equities First. Equities First is a company that has been providing these types of loans for nearly 15 years. Since they started funding these loans, the company has completed over $1.4 billion in transactions. They typically are able to meet their clients’ financing needs, which can include lower interest rates and fees. The company has the ability to help customers out of their international offices in the United States, London, Hong Kong, and Australia.