You may think that your online stock brokerage is a wonderful, convenient place from which to get a margin loan. You’re right. It is convenient. But did you know you are almost certainly getting far less cash and paying out a very large amount in interest? On top of that, your brokerage will bring the ‘axe down’ and issue an immediate, discussion margin call the minute your portfolio falls in
Let’s say you own a multi-stock portfolio that includes some bonds and mutual funds, totalling about $100,000 in value. It’s not in an IRA, and the stocks are all solid, have been in the market for awhile, and come with prices of at least $5 a share. If so, you qualify for the A. B. Nicholas LeverageLine credit line program, which has no impact on our client’s credit records, as
When is the Best Time for a LeverageLine? One of the questions we get often at A. B. Nicholas is “When is the best time for a stock loan?” – a loan against one’s stock portfolio rather than on one’s credit or a loan guranteed by another asset or assets. In truth, the best time for a LeverageLine-type stock loan is virtually anty time. But we’ve found that the majority
Why Am I Stuck with an Expensive, Impersonal, Insufficient Stock Margin Loan? Let’s say you opted for ease and convenience. You’re paying 7-8% interest on your brokerage-provided margin loan and hate watching the cash flow out of your account. You’ve settled for a lousy 50% loan-to-value against your stock portfolio’s value and not a penny more. You are paying for side services, such as advisory & processing services, slipped in
Why would you throw thousands of dollars down the drain? You are an owner of $75,000 or more in stocks, bonds, T-Bills, or mutual funds. You are ready to use it as collateral for a credit line to support your new franchise or business acquisition. A stock loan or portfolio loan, as it is sometimes called. You chose this path because personal and business interest rates are sky high now.
What Is Opportunity Cost? Opportunity costs represent the potential benefits that an investor misses out on when choosing one option over another, in this case, in foregoing an A. B. Nicholas LeverageLine versus other choices. Because opportunity costs impossible to completely know for sure, by definition, they are often ignored or not even acknowledged. Recognizing a missed opportunity from all perspectives should be a requirement for any investment — or
If you’re interested in financing your franchise without having to sell your stock portfolio, you may consider using it as collateral for a loan. By doing so, you can free up funds without having to sacrifice your existing assets. Using your stock portfolio as collateral for a loan has a number of benefits. It allows you to keep your investments in the market, which means you can continue to generate
Securities based lending and margin lending are two forms of borrowing that use investments as collateral. They can both be powerful tools for investors, but they work in different ways and have different advantages and disadvantages. In this article, we will compare securities based lending vs margin lending and help you decide which one may be the best choice for your investment strategy. Securities Based Lending How it works Securities-based
What is a 203k Loan? A 203k loan is a type of home renovation loan that is backed by the Federal Housing Administration (FHA). This loan allows homeowners to borrow funds for the purpose of repairing or upgrading their property. What are the benefits of 203k Loans? One of the major benefits of a 203k loan is that it allows homeowners to finance both the purchase of a property and
What is Corporate Stock? Corporate stock, also known as company stock or simply stock, is a type of securities that represent ownership in a company. When you buy a company’s stock, you become a shareholder, which means you own a piece of the company and have a claim on its assets and profits. When a company issues stock, it is essentially selling pieces of ownership in the company to investors
What are portfolio loans? Portfolio loans are a type of mortgage loan that lenders originate and hold onto instead of selling on the secondary market. Because these loans are not sold, lenders have more flexibility to offer unique terms and conditions, including customized interest rates. What are portfolio loan rates? Portfolio loan rates are the interest rates that are charged on portfolio loans. Because portfolio loans are not sold on
What is securities lending? Securities lending is a practice in which an investor temporarily loans out their securities, such as stocks or bonds, to another party in exchange for cash collateral. This practice allows the borrower to gain access to the securities they need for their own investment purposes, while the lender can earn some additional income from the loan. How does securities lending work? In a typical securities lending
Securities-Based Line of Credit: The Benefits of Using Your Investments as Collateral Are you looking for a flexible and potentially low-cost way to borrow money? A securities-based line of credit (SBLOC) may be a good option to consider. In this blog post, we’ll explain what securities-based lines of credit are and the benefits they offer. What is a Securities-Based Line of Credit? A securities-based line of credit is a loan
Bitcoin loans are a relatively new way for people to borrow and lend money using the popular cryptocurrency. In this post, we will explore what bitcoin loans are, how they work, and the advantages and disadvantages of using them. What are Bitcoin Loans? Bitcoin loans are a type of loan in which the borrower and lender agree to use bitcoin as the primary form of currency. This means that the
What Are Securities in Finance? Securities are financial instruments that represent ownership in a company or debt owed by a company or government. They are traded on financial markets and provide investors with a way to earn income or grow their wealth by buying and selling securities. Types of Securities There are two main types of securities: equity securities and debt securities. Equity securities, also known as stocks or shares,
What is a Margin Loan? Margin loans are a type of loan that allows investors to borrow money in order to buy more securities than they would be able to purchase with just their own cash. This can be a useful tool for investors who want to increase their potential returns, but it also comes with additional risk. In this blog post, we’ll explain how to get a margin loan
UPREIT vs. DownREIT – Why UPREITs Are Great for Taxes What is an UPREIT? A specific kind of real estate investment trust is a UPREIT. A taxable or tax-free partnership can be turned into a REIT using the UPREIT structure. A property owner who would prefer REIT stock to cash can also use the UPREIT as a tax-deferred mechanism. If you have a partnership interest, you might want to think
What about taxes and your stock secured loan from the A. B. Nicholas network? Well there’s some good news there as well. A typical loan for a high end asset — say a yacht or an expensive sports car — requires a lien on your asset(s), and has an impact on your credit score. That may be fine with you – after all you may buy other items via your
You have capital and need more quick? So you own a significant portfolio of stocks, bonds and REITS. About $200,000 in current value. This is your investment; it may be your nest egg for retirement, or for your child’s college education. Whatever the reason, you invested with the hope that the investment would retain its value and with a bit of good luck, increase. There really is no other purpose,
Conventional small business loans vs business credit line… You may be familiar with it. You may have even applied for one. It might be a secure or unsecured loan, but it will likely be far less than you need to buy or operate your business for an extended period of time. You could go for an SBA loan, although with SBA loan interest rates now approaching 9%, this is a
Our field of finance here at A. B. Nicholas is geared to obtaining competitive offers for our clients so as to save them significantly on interest costs while helping them obtain the amount of credit against their stock portfolio commensurate with their needs, typically the largest amount possible. The LTV – loan-to-value – in our business is referred to as the “release rate”. The higher the release rate percentage, the
Real estate investment has typically followed a conventional path: Your downpayment and interest rate determine how much you will pay per month. For example, if you were to purchase a home at 30 years for $400,000,with an $80,000 downpayment, the monthly payment would come to approximately $2,264 at a rate of 6.3%. The same home, however, with a downpayment of $200,000, will generate a monthly cost of only $1,521. For
Small Business Finance: Small Business Capital from Our Lenders In the world of small business finance, finding the right lenders is key. Let’s see if we can guess your situation. You are starting a small business, and perhaps planning to liquidate your stocks and bonds to raise the cash you need? Maybe you are concerned that you will have capital gains taxes when you sell, which might cost you
Franchising Opportunities and the LeverageLine Network How can the LeverageLine Lending Network help fund franchise opportunities? When it comes to exploring your franchise opportunities you have many different sources, including brokers and direct franchise marketing departments, to choose from. If you have the cash it will not be hard to find a suitable franchise to purchase. But for many borrowers that is just the beginning of the financial odyssey that the
Cannabis Investor? When SBA Says No, We Might Say Yes… The rise in cannabis stock investing has taken the U. S. market by storm recently. With medical and recreational cannabis use on the rise, and the use of CBD derivatives increasingly popular in forms as diverse as hair treatment and skin creams, the industry is expected to continue rising in sales and investment in the next few years. For individuals
A Margin Loan or an Asset-based Line of Credit? Long ago and quite far away, it was once possible to buy $1,000 worth of stock, then use it as collateral for loans of as much as 90% of the value on some exchanges. That loan could them be used to buy $900 worth of additional stock. Once again, the stock owner could get a stock margin loan for 90%, giving
