In a general sense, banks have tightened up their criteria for lending and are not too keen on letting loose of funds to just anyone. In this current environment, some may have had their credit tarnished a bit, through tough business situations, and some conventional credit based loans are difficult to obtain.
People still need to borrow money in situations where opportunities are beginning to show in a new thrust by a new president, and yet there is still stagnation from loan sources. If a quick loan is needed, sometimes an equity based loan is the answer.One of the biggest reasons for the securing of an equity loan is to loosen up working capital. Payroll still needs to be paid, equipment needs fixing, and inventory has to be purchased, or nothing gets sold.
Equities First is not providing a stock-based loan in this case, where a person is loaned money on the margin and then must also be pre-qualified similar to a regular bank loan. This type of loan is a stock-based loan, and the money does not have to be used for any particular purpose.This form of loan is ideal for the well-heeled small business person who can turn a quick profit with the borrowed money and can use that leverage for a solid profit.
This type of creative business loan will normally have a higher loan-to-value ratio than a typical margin loan, and they normally have a fixed rate of interest which offers a reasonable zone of comfort and predictability throughout the transaction.In an economy where working capital for business has been scarce, to say the least, loan collateral from equities is a smart way to get through some of the tough spots in a business like working capital, inventory funding and payroll needs and purposes.