A. B. Nicholas Securities Finance specializes in lending against portfolios of stocks, bonds, and/or mutual funds. That is our field of expertise.
But we may, if the asset is thoroughly validated, be able to use other high-end “luxury” assets, including commercial real estate, luxury vehicles, private jets, or other high-value assets provided that there is an active and demonstrable liquidity exit for each candidate asset. Please note that auctions or estate sales are not considered valid liquidity options, as these can take weeks or months to arrange, which would not be an acceptable risk for our lending partners.
Examples of a valid document liquidity exit market would be oil delivery contracts; a thriving and profitable business with up-to-date accounting statements from a major accounting firm; a rare, certified, authentic collector’s item with a vibrant well-known buy-sell market; or a luxury car from a major manufacturer.
In short, the kind of robust marketplace that you’d look for to sell your asset, is the same kind of market your lender will look for to lend against it.
The key for this type of lending is
1) Verification. Because organized fraud centers on forged paperwork or other false “proof, we at ABN demand the highest level of verification possible; and 2) A valid, lively liquidity market to exit into should default on your loan.
When applying be sure to include information on this liquidity exit, if you know where and how it exists and can prove it.
Keep in mind that a major lender will assume the worst case in terms of risk abeyance, so assume that every hour after worst-case default event that the lender is left holding the asset without repayment, the less likely the lender will enter into the loan in the first place. Like stocks or other fungible assets, a live buy-and-sell market must exist to qualify for a LeverageLine.
If you have an asset you are interested in having us review, simple use our contact form and let us know what you have. Send along any basic docs. If we give you the green light to formally apply, apply in full here and we’ll get a term sheet out within hours.
LeverageLine-style credit line. ABN cannot use forms of collateral besides real estate property other than securities portfolios (e.g., gems, paintings, standby letters of credit, etc. ) for this program.
To apply, simply use our Quote Request form and describe the particulars. Attach a personal financial statement (PFS) and ID. If eligible, we will issue a term sheet within 24 hours and your LeverageLine application will proceed along the usual fast timeline.
See also our discussion of LeverageLine for the real estate client, which focuses on use of securities portfolio lending to purchase commercial real estate.