Equities First Holdings is a lending company with a global reach. It offers stock-based loans and personalized financial solutions to customers, and it utilizes organic and natural market cycles for its lending. Stock-based loans are not the same as traditional bank loans. They provide consumers with a lending option that solves some common problems with regular loans. If customers have their own stock portfolios, they can leverage their assets to acquire funding. One of the reasons why stock-based loans are so popular is because they come with low fixed interest rates.
EFH has facilitated more than 900 major lending transactions. While the company’s main continental market is Europe, it also has a strong presence in Asia and a growing presence in North America as well as in other countries. In addition to loans for personal use, the company offers its financial products to businesses. Another reason why EFH’s stock-based loans are popular is because they do not come with the long waiting periods that are associated with regular bank loans. Investors can secure funding quickly and easily with their publicly traded stocks. The stocks become collateral for the loan, and a client can repay the loan with a flexible payment plan. Since many people seek funding when their finances are already tight, the flexible payment plan provides clients with some assurance that they will see their stocks again.
When Al Christy Jr. started EFH, he had a vision to build a company with transparency and integrity as core values. The company’s mission is to provide customers with maximum profits at a minimum risk. With this mission in mind, EFH tries to help customers reach their own professional and personal goals. The company started in 2002. Mr. Christy wanted to offer loans to people all around the world at that time. His company’s stock-based loans gained popularity, and the company soon grew to be a powerful entity in Europe. It eventually expanded and reached other foreign markets. Today, it is known as one of the most notable finance enterprises in the world. In the United States, EFH is currently based in Indianapolis, Indiana. There is a satellite office in New York City.
EFH established its London branch in 2013 to meet the high demand for stock-based loans in the United Kingdom. This expansion marked a key point in the company’s history since it brought a significant increase in profits. In recent years, EFH has partnered with several notable financial companies such as Meridian Equity Partners. When EFH partnered with Meridian in 2013, its workforce increased by 50 percent. That growth led to the opening of the company’s branches in Jakarta, Hong Kong and Singapore. In 2014, EFH was acquired. The company’s president called 2014 a major year of expansion. After the acquisition, five new offices were established in the United States, Australia, Asia and Europe. EFH saw improved margins and more clients after its 2014 expansion, and it gained more recognition in existing and prospective markets around the world. With the popularity of its loans, the company predicted that expansion would be inevitable. However, EFH stressed that any future expansions would not affect the quality of service for its loans.
Another lending agreement was initiated in 2014, which involved a well-known company called PaySafe. EFH’s CEO completed a major transaction with Angle in 2016. It returned collateral shares that totaled $1.35 million. Today, the company has completed more than $1.4 billion in transactions. One of EFH’s goals is to provide its clients with a customized experience that fits their unique financial needs. It has maintained a track record of keeping this practice throughout its history and has maintained its commitment to making customers feel valued.
When they use stocks as collateral, clients can pick loans that meet their specific needs. EFH watches market trends carefully to ensure that interest rates stay as stable as possible. With bank loans, variable interest rates are common and are also unpredictable. The most common financing options include credit-based loans, shareholder financing and secured loans. EFH has a borrowing system that gives clients more decision-making power in the formation of loan terms. If a borrower uses a traditional bank loan, it is up to the bank to decide the terms. Since stock-based loans come with fixed rates, clients are more likely to pay off the balance within a specific time frame. EFH assures prospective borrowers that the company will respond to their lending questions or requests within 24 hours. The company made its loan process speedy. In comparison with a traditional bank’s information collection requirements, EFH does not ask for as much personal information from its borrowers. On its website, the company notes that it has a perfect record of providing on-time funding to qualified borrowers.
When prospective borrowers or returning clients visit the EFH website, they have access to complete information about the lending process and the steps involved. The company breaks down the process into five distinct phases.
To save time, EFH encourages borrowers to have their necessary documents in order before they apply. This includes information about any collateral stocks. Also, borrowers must submit their request for a desired loan amount. Once the documents are received by EFH, the company discusses loan-to-value ratios and interest rates with the applicant. Borrowers can usually expect their fixed interest rates to fall somewhere between three and four percent. For loan-to-value ratios, the average range is between 50 and 75 percent. Since the loans do not come with restrictions, borrowers can use the funds for any purpose. One common concern among borrowers is what happens if a collateral stock’s value drops. Fortunately, borrowers can usually walk away from the loan free of obligations if this happens. This is because most agreements are considered non-recourse loans.
EFH finalizes loan terms and rates after the initial consultation. The company discusses those terms again with the borrower to ensure full understanding. After this, the two parties complete a transaction application, which is an important part of the company’s due diligence commitment.
After the transaction agreement is complete, a collateral transfer takes place. With a stock-based loan, this means that the client transfers the collateral stocks to one of EFH’s global custodian accounts. The process is similar to the concept of pawning an item. At that time, EFH transfers money to the borrower.
Once the borrower’s stocks are in the global custodian account, they go through a final valuation process. Next, EFH drafts a closing statement that includes the transaction’s final terms. This is delivered to the borrower with any other proceeds, which are calculated based on the final valuation of the stocks.
When borrowers meet the terms of the loan and make all required payments, their collateral is returned to them. This is done in accordance with the terms of the loan that were outlined at closing. With full repayment of loan funds at maturity, EFH maintains a perfect record of collateral return.
Many businesses and individuals use the services of EFH because of its commitment to returning stocks as agreed and for its clear contract terms. There are different regulatory bodies that oversee the practices of EFH and other lending institutions in each country where the company operates. It currently has 13 offices around the world. EFH’s loans are classified as non-recourse loans, which means that the client retains the market’s upsides. In most cases, it takes up to five days for the stocks in an EFH global custodian account to be returned to the borrower.
An example of EFH’s proven collateral return was with its PaySafe contract. In 2017, a press release provided the details of the transaction between PaySafe and EFH, and it stated that the entire collateral deposit was returned to PaySafe after the company met the terms of the loan. The PaySafe loan was issued in 2014. This completed contract was a big success for EFH and paved the way for more lending opportunities with big businesses.
In recent months, EFH made a $30 million transaction to ensure the availability of more development funds in the coming years. It is currently focusing on major research and development projects in India. Environmental Clean Technologies Limited of Australia was the other party in the transaction, and it is known for its technological developments in the iron manufacturing industry. For its research and development efforts in India, EFH is planning projects that will advance both mineral and energy technologies. The company’s biggest accomplishment of the year was a special approval for a different financial service, which was detailed in press release.
In the earlier part of 2018, Dubai Financial Market granted a special repurchasing agreement provision for EFH. A repurchase agreement or a repo is a financial contract that leaves a repo seller with capital, which is connected to the seller’s collateral. The repo buyer is the party that provides the funds. The seller may repurchase his or her securities after a predetermined period of time. An important part of the agreement is the repurchase price, which is determined at the beginning before the contract is signed.
DFM has not granted such an approval for regional markets in the past. However, the move to allow EFH to become a registered repo buyer was a big indication of the company’s growing presence in global finance. With this new approval, EFH can provide repo services as long as it complies with the regulations of DFM and the regulations of the Securities and Commodities Authority. Also, the decision means that investors have more access to liquidity and do not have to limit their chances of future growth to attain it.
EFH’s chief operating officer said that the company was pleased to be the first repo provider in the region and that it had the opportunity to support DFM’s leadership position. According to the COO, the repo service will help the company identify new investment opportunities that align with DFM’s product diversification strategies. In a repo transaction, investors of DFM can give up a portion of their security value with the cooperation of the lending company. They can turn around and trade them on the market. When this happens, the overall trading activity for the market is improved.
CEO Al Christy Jr. called the UAE an emerging market in a press release statement. He specified that DFM had been an integral part of the EFH growth strategy for many years. According to Mr. Christy, the need to improve liquidity in the market still exists. He said that EFH’s approval as a repo buyer will open new opportunities in the future that may benefit investors and businesses with holdings to leverage for growth. Another EFH representative predicted the demand for the company’s repo services to be high during the next several years. The press release ended with a statement about the company’s plan to immediately execute repo transactions with clients and its commitment to uphold the regulatory requirements that apply to its newly approved financial service.
One of the top goals of EFH is to reach the $2 billion mark for total loan disbursements. Although its current transaction total is close to 1,000, it would like to reach 2,000 within the next few years. EFH hopes to become the top lending entity for personal and business loans, and it hopes to maintain that status whether global economies are thriving or struggling. Since EFH’s loans are not conventional, it stands a better chance of surviving an economic recession than many traditional lending providers. Market fluctuations are inevitable during any three-year period, which is the standard term for one of these loans. Since the loans are based on stocks, they offer a hedge because of the reduced risk in a downside market. This eliminates the risk of a damaging default, which a buyer could face if he or she could not repay a traditional bank loan.
EFH’s fame came from its core offering of stock-based loans, and it hopes to be the first company that people think of when they talk about such loans in the near future. This is an important growth objective since stock-based loans are becoming more popular every year. The company has already taken steps to establish itself as an authority figure on stock-based loans. EFH places a high level of importance on securing money for customers in a timely and efficient manner. To ensure that this provision continues, the company plans to maintain its simplified application process and to maintain its minimal requirements for collecting client information. Also, it plans to continue its policy of providing responses to inquiries within 24 hours.
Mr. Christy said in an interview that every financial transaction comes with risks. He pointed out that stock-based loans have been largely ignored in the past because of the poor practices of a few untrustworthy lenders. Some of the lenders in the past dropped the collateral stocks of their borrowers into the open market, which left the clients with nothing to collect after they completed their loans. Several lenders did not return stock options to borrowers as agreed. Also, some lenders simply provided poor customer service and did not address the concerns of borrowers. For these reasons, EFH developed strong policies to maintain ethical practices. Mr. Christy hopes to see stock-based loans continue to grow in popularity and to see companies uphold their agreements and obligations. With these types of loans, providers must comply with regulatory requirements and must have good legal counsel.
In the future, EFH plans to continue educating consumers about stock-based loans. Some people assume that stock-based loans are the same as margin loans. This is because both types of loans involve collateral in the form of securities. However, there are differences. As it is with a regular bank loan, a borrower must be pre-qualified for a margin loan. While borrowers can use stock-based loan funds for any purpose, there may be specific requirements or restrictions with margin loan funds. Additionally, margin loans do not come with fixed interest rates. The variable rates may fluctuate between 10 and 50 percent. If there is a margin call, the lender of the margin loan may liquidate the collateral of the borrower without notifying that individual.
Many banks have cut their lending choices for consumers, and there have been more restrictions over the past several years. Although individual borrowers still have plenty of options, qualification rules are stricter today. The combination of this factor along with rising interest rates shows why traditional loans are losing popularity. People whose credit suffered because of the financial impact of the Great Recession are hesitant to take out risky bank loans if they are not completely sure that they can repay them. According to Mr. Christy, a stock-based loan is an innovative solution to borrowing money for working capital. Mr. Christy said that EFH wants to help more business owners and individuals realize the benefits of these financial products. The company provides more details about stock-based loans on its website.