Equities First Holdings specializes in providing solutions for alternative shareholder financing. This global lender has filled a serious need in the global credit market by offering unique solutions for borrowers who might otherwise have difficulties due to the shortage of traditional credit being offered by big banks. Their lending model is based on a reliance on stock valuations owned by borrowers who may not have other more traditional sources of collateral to present to banks and other institutional lenders. This alternative financing transaction is based on the assumption that best stocks provide higher returns compared to traditional interest rates – think of stocks such as Tesla, Netflix, or Zoom that have reached more than 300% in a single year – and it is becoming more widely known as equities lending.
History and Growth of the Company
Since Equities First Holdings was founded in 2002, it has completed more than 1,000 transactions to provide creative financing solutions for its clients. It has expanded into 12 office locations across the globe and maintains its global headquarters in the U.S. Al Christy, Jr. oversees the global operations and develops the strategy behind Equities First Holdings as its Executive Chairman and Chief Executive Officer. Jeff Smith serves as the Senior Managing Director and Chief Compliance Officer. The leadership team at Equities First Holdings boasts extensive experience in managing and developing successful financial institutions all over the world.
Services Offered by Equities First Holdings
When finding liquidity is challenging, proactive business leaders turn to Equities First Holdings to facilitate unique loan transactions. The major categories of loans that Equities First Holdings provides include the following.
- Credit-based loans
- Secured loans
- Shareholder financing
There are five steps involved in these main categories of transactions, which are customized for each individual loan.
1. Initial Loan and Stock Portfolio Evaluation
The specific details of the client’s needs and the client’s stock portfolio value are discussed to establish a loan-to-value ratio. All interest rates for loans through Equities First Holdings are fixed, and the applicable rate is set at the outset of the transaction.
2. Formal Loan Application and Agreement Executed
Once the client accepts the loan amount and interest rate, a formal application is completed. This application is submitted to the underwriting department for risk assessment and approval. In addition, the client formally signs the loan agreement.
3. Loan and Transfer
Upon completion of the formal application, a simultaneous transfer of the client’s stock collateral and the cash funds from Equities First Holdings is executed. The exact terms of the transfer are set forth in the formal loan agreement.
4. Valuation and Closing
After the transfer of the collateral and cash is completed, the collateral receives a final valuation. The client always receives a written copy of the final evaluation of the collateral at the time of transfer. The closing statement includes all of the final terms and details of the transfer.
5. Return of the Collateral
Equities First Holdings has earned a lasting reputation for reliability and trustworthiness based on its perfect track record of always timely returning the client’s collateral pursuant to the terms of the final loan agreement. As long as the borrower satisfies all of the obligations spelled out in the loan agreement, they can expect a completely smooth transaction and the accurate and prompt return of their collateral.
The value of this lender’s track record of precise and flawless transactions cannot be overstated in terms of why Equities First Holdings has distinguished itself as a leader in the equities lending field. However, the loan terms that Equities First Holdings is able to offer its clients are also a strong contributor to its dominance of this specialized market. For example, the average interest rates for all of the transactions it has completed in the past 17 years is between 3 and 4 percent. It also offers 70 percent loan-to-value ratios.
Another way that Equities First Holdings has managed to revolutionize the traditional lending market is by offering 24-hour turnaround time for closing all loan agreements. This tight response time is unaffected by the size of the transaction or the physical location of the parties. The relationships that Equities First Holdings has developed with other financial institutions, law firms and major corporations provide access to a growing list of clients and opportunities for Equities First Holdings to help clients overcome financing hurdles.
Equities First Holdings infused more than $1.4 billion of liquidity for borrowers across a wide range of industries. Its successful track record in Europe paved the way for Equities First Holdings to step up as a primary funding source for companies’ research and development goals in areas where credit and financing have been particularly difficult to come by, such as India and Africa. Its growing global operations will enable this innovative firm to continue its role as a leader in the field of alternative lending solutions for individuals and corporations alike.