A majority of investors currently find stock-based loans to be the best options when it comes to traditional loans. With the fall of world economy following the crisis, some analysts described the operation of the shadow banking system to be the reason for triggering the events. Some termed it as “malign neglect” and claimed that regulation could have been imposed on the entire banking activities.
Before the fall, the securitization markets that depended on the shadow banking system began terminating their operations in the spring of 2007, and in 2008, they almost shut down. Over a third of the independent credit markets that were once sources of funds became unavailable. The traditional banking system did not have the capital to close the gap as that could take many strong profits’ years to produce adequate resources that could support the extra lending volume. Also, some kinds of securitization were more likely to disappear forever, having been the objects of extra loose credit conditions. For serious borrowers, stock loans are quickly becoming better alternatives of traditional lending as investors can acquire emergency and adequate working capital. Equities First has, of late, been registering a great traction of borrowers as confirmed by Al Christy- the founder and CEO of the company.
After the beginning of the crisis, there was a boom of commodities’ prices before the housing bubble collapse. The oil price almost tripled from $50 to $147 from 2007 to 2008 respectively before dropping as the crisis started to take shape in 2008. Financial experts debate the factors with many attributing it to tentative flowing of cash from housing among other investments. Some huge amounts of cash were also directed to monetary policies, tackling scarcity of raw materials, among others. SMEs find it easy to rely on alternative lending, and at Equities First, many investors have reaped the benefits of stock loans.