Every now and then we get an agent who tells us, “I wish I had remembered LeverageLine when we were talking about financing that project.” Often, they have assumed that the client was not eligible based on faulty information. It’s actually more common than you might assume.
This is not too difficult to understand. A stock-secured loan option is typically not the first place a client goes to or even things about when considering a major financing endeavor. Banks are typically the first stop, and since the typical bank makes its profits and success off of interest on loans, there is little incentive for a bank to steer you towards a product like LeverageLine.
The same is true of clients who typically think of a loan against their securities as a “margin loan” although that is NOT what a LeverageLine is. As we’ve stated in our blogs and training programs elsewhere, LeverageLine averages all of the securities in a portfolio to determine overall collateral value, not just one security, and it is “non-purpose” credit as defined under federal banking regulations, meaning LeverageLine proceeds cannot be used to buy further marginal securities, but CAN be used to buy anything else AND because of this, can enjoy a loan-to-value ration of up to 95% compared to a standard margin loan rate of only 50%.
Furthermore, our LeverageLine can be combined with other types of financing, including SBA loans, conventional bank loans, and virtually any other form of financing. Not so with margin loans, which exist for the purpose of purchasing more stock, not for application to other investment purposes.
As an Agent, your best strategy for developing new business is simple: Use your AIN clickthrough code and pick any page you like on our website a www.abnicholas.com as the gateway for your clients’ first introduction to LeverageLine. Choose www.abnicholas.com/stock-loan, or www.abnicholas.com/leverageline or www.abnicholas.com/quote or www.abnicholas.com/faq. It doesn’t matter, nor does it matter what other pages on our website they go to so as to learn more about LeverageLine, or even if they call A. B. Nicholas directly. That’s because we ONLY accept financing applications via our secure application form and no other way, not via email, not by fax, not on the phone. When any client does apply via our quote form, your agent information is automatically captured and that client is credited to you for fee purposes.
So stay alert — check those Personal Financial Statements carefully. Ask your clients outright if they own any publicly trading stock that is no part of an IRA or 401K. Chances are that most high net worth people DO have an eligible portfolio, and if they do, it behooves you to get them a term sheet.