Over the past 10 years, the turbulent international economy has had an impact on many industries and other financial considerations. One area in which it it has had a very significant impact, is in the field of consumer lending. The turbulent economy, and tightened credit standards, have made it very difficult for the average consumer to obtain personal loans.
For consumers that are looking for a personal loan, but are not able to obtain one from a bank, another option may be to take out a stop secured loan. One leading provider of stock secured loans is Equities First, which is an international specialty finance firm.When taking out a stock secured loan, the lender will take a security position in a stock portfolio that is pledged at loan closing. In the event that the loan payments go into default, the lender will then have the option to liquidate the stock to pay off the outstanding balance. This provides the lender with an excellent source of liquid collateral, which allows the lender to provide low interest rates and fees even compared to bank that.
While there are advantages of stock secured loans for lenders, there are also advantages for consumers. The main advantage is that it allows in consumer to access liquidity without having to actually sell their stock. Depending on your personal situation, this can have significant tax and investment strategy advantages. It is particularly ideal if you have not owned a stack for a long period of time and selling for a gain would lead to a significantly higher tax rate. Furthermore, if you think the stock will increase in value in the coming years, it would make far more sense to hold the stock for a little bit longer and borrow against it instead of selling it.