Financial Problem

How Increased Transparency and Better Regulations Have Attracted Borrowers to Stock-Based Loans

Equities First Holdings, LLC posted impressive gains in the fist-financial half of 2016. This was an unexpected turn of events especially considering the disparaging state-of-affairs in the global financial lending world. In recent times, banks have made it next-to-impossible for borrowers to acquire the necessary funding for capital investments. According to the CEO and Founder of Equities First Holdings , Al Christy. Jr., stock-based loans are innovative solutions because of their higher loan-to-value ratio as compared to margin loans and their lowered interest rates.


A majority of loans typically extend over three years. And, as is common knowledge, it is impossible to escape-the terrible-market fluctuations over that duration. The stock-based loan, on the other hand, has some cushion against this rattling-effects of the markets. The consumer is protected by the non-recourse feature which makes it possible for them to walk away from that loan at any given time.


Margin Loans Versus Stock-Based Loans


Christy went ahead to spell out the differences between margin loans and stock-based loans. The only similarity joining the two options is that they both use securities as collaterals. Interest rates are flexible, and the loan-to-value ratios ranging 10% to 50%. Another feature is that the lender has the right to terminate the contract and proceed to liquidate the collateral of the creditor if a margin call arises.


Stock-based funds, on the other hand, have a fixed interest rate of around 3-4%. The loan-to-value ratios are much higher as from 50-75%. The loan comes with few restrictions, and you are at liberty to use the funds as you please. The no-recourse feature does not apply here.



Many mainstream investors have ignored them because this industry has been a haven for unscrupulous lenders in the past. Lenders who made away with the collateral holdings and the stocks of their borrowers. Christy, however, noted that the increased transparency and regulations now in place meant that fewer unbecoming incidences occurred.


About Equity First Holdings


EFH remains at the forefront of providing competitively-rated loans to business and high net worth individuals. Beginning 2012, borrowers have secured financing solutions capital using their stocks as the only collateral. So far, the company has transacted a total of $1.4 billion. They now operate from 9 countries.


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George Soros’ Predictions for China’s Economy

A recent prediction by George Soros about the state of China’s economy has painted a picture of an economy headed to a financial crisis quite similar to the one of 2007 – 2008 that nearly brought banks to their knees and left many jobless. George Soros ascertains that the symptoms are already there and if control measures are not taken it could spell doom on for the country’s economy which is the second largest in the world.

George Soros who was born in Hungary is famous for netting $ 1 billion in 1992 after predicting that the United Kingdom would be forced to devalue its currency. George Soros is also a successful businessman and is the founder of Open Society foundations as well as Soros Fund Management. He has over the years managed to net a fortune by making wagers on markets. It is for this reason perhaps that prediction of china’s economy has caused such a commotion with the Chinese government quick to water down the prediction. George Soros’ experience in the market and his prowess as an investor makes his words more than a mere banter.

According to George Soros, China’s credit growth figures on are a clear indication of where the economy is headed with the latest measure being 2.34 trillion Yuan which exceeds the median forecast of 1.4 trillion Yuan. The reason for this is believed to be growth being prioritized of debt control. When lending is uncontrolled, banks tend to grant credit even to subprime borrowers who may default on their obligations. Over borrowing also brings about a situation where debts exceed the money deposited as banks focus more on growth. This creates a volatile environment on which is unpredictable. The new credit in China has boosted the growth of the property sector which is not unlike the US environment in 2005 – 2006 before the crisis. Both the credit status of china’s economy as well as the prevailing market conditions such as the booming property sector bare resemblance to the prevailing conditions before the financial crisis.

Even as George Soros makes his prediction, he is optimistic of China’s foreign exchange policy which links the Yuan to several other currencies rather than just the dollar. Additionally, the threats associated with competitive devaluation have also drastically reduced. George Soros also cites that growing cooperation between China and U.S. as resulted in calmer markets. However, despite this and china’s Chief Economist’s reassurance that the economy is probably better than forecasted by some economists, the Volatility index, also known as the fear gauge, has been surging this year which basically means that the investors will be keeping a wary eye on China lest they be ambushed by another financial crisis.

George Soros Predicts A Financial Crisis

Investors have something to worry about at the moment. The financial climate at the moment resembles the one from 2008; a financial crisis might take place. According to George Soros, a popular billionaire and hedge fund manager based in the United States, investors should be very careful before taking any investment decisions.

George gave investors this advice just recently during an economic forum that took place in Sri Lanka. The billionaire is very knowledgeable in financial matters, and his opinion and predictions are not taken lightly. In the past, in the year 2007, George Soros warned investors that there was an upcoming crisis that would affect the economies of many nations, and in a short duration, the 2008 financial crisis started.

The financial crisis that took place in 2008 on affected many countries in the world, and most of the developing nations have not yet gained their old self back. The crisis started in the industrialized countries, and in a short duration of time, it spread to the rest of the countries. The developing countries started feeling the crisis later, and the most affected nations are mainly the ones that depended on the industrialized nations a lot.

This time, George Soros says that the financial crisis is not coming from the industrialized countries. The problem is coming to China. The country’s economy has not been doing well in the recent past, and it is transferring the problem to the rest of the nations in the world. The country has had issues adjusting to the changes it has been making, and this seems to be the problem. The currency of China has also lost value in the recent past due to the changes it has been making. 

For any developing country like China, getting a positive interest rate is quite challenging, so the chances of recovering from this devaluation are not high. The effects of the past financial crisis are still being felt so that another financial problem will have worse problems.

George Soros is the founder of the Soros Foundation and Open Society. He is very wealthy, and most of the time, this financial position makes him have a say in the most controversial topics that come up in the world. He was born in Hungarian, and this is where he spent the first years. After some time, he was forced to move to the United Kingdom, and he took this opportunity to go to some of the best schools in London. 

George Soros located and settled in the United States of America after completing his education in London, and this is where he has managed to create his wealth. At the moment, he is considered to one of the richest people in the world, and he uses his money in charitable organizations and political activities.