Individuals with over a million dollars in assets are referred to as having a, “high net worth.” The way that most of these people reached that status is by learning how to successfully position their investment portfolios for gains. Often this is accomplished using “non-purpose” capital. Equities First Holdings (EFH), specializes in high net worth lending. Equities First is involved in lending variable forms of alternate capital, often classified as “unusual” funding.
The type of funding that falls into the category of unusual most often requires Equities First to secure stock as collateral. Once, Equities First Holdings secures the collateral stock, they then provide working capital loans, anywhere from 60 to 80 percent of the value. The interest gains are attractive, because they benefit both the borrower and Equities. The average gain in the interest of these loans over a three year is a high three to five percent.
Equities First Holdings was founded in 2002 by Al Christy Jr. and just in the first eight years, the firm saw an increase in demand for capital loans. During those first years, Equities First Holdings, LLC., successfully completed over 400 loans. At that time, Equities First asset management portfolio was valued at an estimated $40 million.Fast forward to present day and the firm has seen a continual rise in its lending rates. This is especially impressive, because numerous constraints that have influenced lending criteria. Most notably after the US financial crisis, major lenders tightened the regulations and terms for borrowers.
Since Equities First provides secure working capital loans, the changes didn’t adversely affect their business model. As founder and CEO, Al Christy Jr. always monitors the collateral stocks that his firm manages. When asked about the valuation of high risk loans in challenging financial times, Al made this observation, “During a typical three-year loan term, market fluctuation is inevitable, but stock-based loans provide a hedge because the borrower is lowering his or her investment risk in a downside market.”
Equities First continues lending, because fluctuations of stock market prices won’t change the interest gained by the borrower. The working collateral loans provided by Equities are written with a clause that allows the borrower to opt out at any time, without penalty. This applies even if the value of the collateral stock decreases.
In December 2016, Equities First announced that it was granted a money lending license in Hong Kong.