By proceeding with the use of this website or with any application for services from A. B. Nicholas, you are stating that you have read the following Disclaimer before you have proceeded with your financing application. Please read carefully and call (202)-379-4744 if you should have any questions or contact us here.
A. B. Nicholas LLC (ABN) is a stock loan/securities-portfolios-as-collateral credit line referral network service. Our clients come to us for introduction to a competitive lending program from a licensed, public, household-name brokerage or banking partner with who have agreed to quote wholesale, competitive stock loan rates on client-friendly terms. Our goal is a licensed and safe alternative to the standard “default” margin loans (which are often very expensive and impersonal hard maximum lending caps) while bringing a measure of competition to the process to the degree we are able.
ABN is therefore an informal network of qualified FINRA-member securities and finance professionals who have agreed to provide competitive pricing and terms to our referrals. In many cases, this system can save our clients thousands of dollars while putting additional loan cash (can be up to 95% of a portfolio’s value) in low-cost bank credit or as a loan.
At no time does ABN hold, trade, or broker any securities in any manner; nor does ABN authorize any third party or any agent to provide:
- Tax advice of any kind related to ABN programs, unless the ABN referral agent is properly licensed to do so
- Investment advice of any kind, including dispensation of retirement funds or securities, unless the ABN agent is properly licensed to do so.
- Any form of securities buy-sell advice, unless the ABN agent is licensed to do so.
- Insurance advice, unless the ABN agent has the required and applicable licenses to do so.
No Institutional Compensation: A. B. Nicholas receives no compensation, consideration, or remuneration from any of the lending institutions in our network in any manner. This policy extends to the receipt of gifts or services, etc. Our goal is the lowest interest rate and highest authorized release (loan-to-value) for our clients only.
To repeat: No member of A. B. Nicholas, its staff or agent affiliate force or partner organizations is therefore compensated in any manner by any of our licensed lending institution partners. Any individual engaging in such actions does so without ABN authorization and legal action will be taken if necessary.
Clarity of Role: By proceeding with your ABN application you are agreeing that no member of A. B. Nicholas, its staff or agents has held themselves out at any time as an employee, broker, or consultant for any of our network of lending institutions. Our partnerships are solely for the benefit of our clients and all transactions are solely between the licensed institution and advisor; ABN can intercede if our clients report a problem but we do not involve ourselves in any manner of brokering or advising or possession in any way of a client’s securities.
Understanding of Terms: We reiterate that no client should proceed with any A. B. Nicholas service if they do not understand and accept these disclosures.
No Handling of Securities at Any Time: Neither the staff or agents of A. B. Nicholas handle, process or manage in any way any of our clients’ securities of any kind at any time; nor does ABN provide any form of advice on the buying or selling of any particular security. In certain cases, ABN referral agents who possess the proper licensure in their state my offer these services, but this has no association with A. B. Nicholas and must be considered a private service contract between the client and the agent if correspondence enters any area covered by applicable legal restrictions.
Front Door Role Only for Our Network: ABN acts as doorkeeper for access to the financing facility network that it created, which can in many cases meet the lending needs of certain markets/client, including franchise buyers, commercial real estate investors, and business buyers. ABN’s role is to open a pathway to a licensed facility via — to the extent possible — competitive, wholesale rates and terms. Then should the client wish to proceed, all interactions related to the lending process thereon shall be solely between the licensed lending institution and the client. A. B. Nicholas steps away except to observe. Rarely does ABN need to step in to inquire about any issues. Virtually 100% of all matters related to the financing provided using the client’s securities as collateral are wholly by, for, with and through the licensed advisor alone.
Not a Mortgage: Whereas a home buyer has the right to use their funds in any manner they like, ABN/s LeverageLine program is NOT a mortgage nor should be treated as such. No real estate acts as collateral for any A. B. Nicholas product, only securities portfolios within and under the purview and management of a fully licensed FINRA-member advisor. Those federal agencies regulating mortgages require that this distinction be clear.
Use of Proceeds: Nevertheless, a client has freedom to use proceeds from their ABN financing for any legal purpose they choose, including real estate investments or down payments, if they wish. The proceeds of ABN-introduced credit lines or loans are restricted only in that they cannot be use under federal regulations for purchasing more marginable stock.
Integrity of Services: A. B. Nicholas seeks to act objectively at all times in pursuit of the optimum lending terms for our clientele. It is strict company policy that there can never be an advantage, financial or otherwise, for A. B. Nicholas, its staff or agents, to route our clients to any particular institution or lender advisor.
ABN Mission Statement: “We seek to find the best securities-based financing outlets we can for our clients, and nothing less.”
How Interest is Measured: All standard LeverageLine interest rates are variable rates, based on a discounted “house” rate, an institution-determined figure based on various market indicators that is keyed to the size of the credit line offer, with lower rates for larger lines of credit in inverse proportions. To this is added an increment based on 30-day (monthly) LIBOR. (See the 30-day LIBOR rate on any of the major financial sites, including Bloomberg or Bankrate) Until recently, the 30-day LIBOR rate has remained within a relatively small range of variance. Bloomberg.com has the latest figures.
You may also opt for fixed rate financing if you wish. On occasion, members of our network even offer “specials” – extra low fixed rates for our clients. Inquire of your licensed lender advisor if this is of interest
Risk Disclosures: Any activity involving stocks, bonds, or other securities involves at least some degree of risk. Securities-based borrowing is no exception. Though historically safe when managed by reputable licensed brokerage and banks, a stock portfolio line of credit neverthless may not be suitable for all investors.
If the market value of your individual collateral securities declines below the institution’s required levels, you as borrower may need to either pay down your line of credit, restructure/reallocate your holdings into more stable securities (which might involve a sale of some stock), or pledge additional eligible securities or cash in order to maintain your loan. Although thanks to highly refined processing procedures at the outset of each loan within each institution the need to do this is relatively rare in our program, it remains a risk.
Our lenders prefer that clients have sufficient resources to qualify as accredited investors if possible. This is typically easy to satisfy for those with assets over $100K. For more on this status, please see https://www.fool.com/investing/2018/02/14/what-is-a-qualified-investor.aspx
Although both A. B. Nicholas and each lending partner advisor make maximum effort to ensure only stable, quality securities are accepted as collateral at the outset (see our loan requirements) so as to minimize the need to restructure or pay down lines, and every client’s account is monitored closely by their licensed lender for any issues, no party related to this financing product can guarantee any specific outcome of any individual security or portfolio of securities. No ABN client should assume that A. B. Nicholas or its lending partners make any such representation. Questions should be addressed directly to the licensed lending institution/advisor alone, as your credit line is solely between client signatory and the lender, not ABN.
In the very worst case of a dramatically falling collateral portfolio for which you have not cured a deficit in collateral value, nor made any acceptable alternative arrangements for repayment, your lender has the right to compel you to sell enough securities to make themselves as lender whole on any outstanding principal that remains. Although A. B. Nicholas has done as much as possible within its powers to make this scenario rare and unlikely by only forwarding applications from clients whose stocks qualify by the lenders minimum standards, the fact remains that it is possible when dealing with securities of any kind to have losses.
Taxes: As always, the sale of any security for any reason may cause a federal or state tax consequence if the basis for your stock (your purchase price) is significantly lower than the selling price at the time of sale. Although few ABN clients have ever been compelled to rearrange their portfolios or sell their stocks to cure a dropping portfolio, it remains a possibility as always.
However, securities are never sold to fund any A. B. Nicholas product or service. Your loan funds come exclusively and always from the lending institution’s cash resources only, not from the sale of your securities in any manner at any time (See note above on taxes). In addition, your lending institution does not take title or ownership of your securities as a precondition to funding. You agree that you understand this when applying.
The Risks of Securities-based Borrowing Can Include:
- Market fluctuations that may cause the value of your securities to decline;
- A decline in the value of your securities that could require you to restructure/sell/pay down line to resolve;
- Adverse tax consequences as a result of selling securities if you should owe capital gains taxes as a result of selling, i.e., if you bought your securities at a price lower than what you will be selling them for.
LeverageLine may not be used to purchase more marginable securities. Nor is it intended to act as a mortgage in any form.
A. B. Nicholas and its officers and employees and affiliates are not authorized to provide legal or tax advice of any kind, unless they are licensed in their state to do so. Please consult your licensed tax specialist or legal advisor for any tax or real estate questions pursuant to LeverageLine financing.
By making any application via this website for A. B. Nicholas services, you are agreeing that A. B. Nicholas has not provided any tax advice of any kind, and that you have not taken nor will undertake any tax-based decision based on any wordings or implied information or conclusions stated on this website and attribute any of those decisions, wholly or in part, to A. B. Nicholas its staff or agents; and that you agree only to consult a third-party licensed tax professional, if necessary, prior to making any assumptions regarding LeverageLine securities-based credit lines/stock loans and tax implications.
A. B. Nicholas is not a licensed financial planner/advisor, mortgage broker, or stock trader/broker, nor an employee of the licensed lending institutions with which we have partnered, as stated. A. B. Nicholas, further, does not hold itself out as such and by proceeding with this financing you are agreeing and understanding in full that A. B. Nicholas and its staff and agents are acting solely in a consulting, qualifying and referring capacity for purposes of delivering this lending service to our clients.
All applicants must attest that they have read this Disclaimer on the A. B. Nicholas application form, a secure IP-encoded form, which is time-stamped for verification and which doubly serves as your contract with us.
You agree that all A. B. Nicholas services are limited solely to client outreach, research, introductory arrangements, sourcing, referral qualifying, and support with select licensed lending institutions and teaming with advisors who have agreed to create the custom, specific leveraged loan model requested by and therefore tailored to our target franchise, business, and commercial real estate clients, a product we have termed “LeverageLine” but in fact applies to any securities-based financing that evolves within the licensed lending institution after ABN has introduced the client to said institution.
Agents of A. B. Nicholas may not receive fees from their referred transactions outside of A. B. Nicholas, and therefore may not register as agents for any referral other than for their ABN financing for the same stock-secured loan application. Agents may not be paid twice on the same transaction. Agents may not receive fees outside of the ABN fee for any ABN LeverageLine transaction. Individuals found to have violated this rule will be dismissed and forced to disgorge fees prior to reinstatement if they have received any other fees or demanded any other fees from any ABN client.
Our lending partners are all major, top-tier, fully licensed U.S. institutions; they are recognizable, regulated brokerages and banking institutions. All advisors quoting clients in our network are in good standing with FINRA. Financing brokerages and banks have fully audited financials as required of all publicly traded companies and SIPC/FDIC registration in good standing as applicable. A. B. Nicholas does not use the services of any unlicensed, non-U. S., or non-regulated lending sources.
Individual advisers with whom we work at the lending institution are all licensed in at least one pertinent field — e.g., Certified Financial Planning — in all states where they operate, which is to say practically all fifty states for major advisors in our network. For any state for which they might not be licensed, or where licensing has expired, they have agreed with A. B. Nicholas to obtain licensure prior to serving any of our clients in those states if necessary.
If any adviser is not registered to provide these otherwise prohibited services in any particular state, that adviser will not be permitted to provide a loan quote or any services to ABN until such licensing is obtained and verified. All advisers are FINRA members with absolutely no negative reports or disclosure events over at least 15 years in the industry.
(Individual advisors or firms interested in joining our lending network who meet these standards are invited to send an introductory email to us here.)
Referral into Lenders Network: ABN has several licensed lenders in the security-portfolio credit line business who are willing to provide competitive, streamlined quotes for clients with eligible stock portfolios. The key is “eligible”; some of the lenders in our network required certain size minimums or maximums, or have designated certain stocks (e.g., cannabis) for which they do not lend against. In such cases, we will deliver to you the lender with the best remaining quote in terms of low interest and size of the release rate (loan to value).
Status: ABN is not itself a lender, nor is it a broker-dealer or financial advisor or a member of FINRA or SIPC (though it works exclusively and solely with financial organizations that are licensed members in good standing of these organizations). ABN acts as a referral company offering this financial avenue for the franchisee and commercial real estate market,
Role: Our chief role after setting up the network is to perform research, including research on ways to improve our services, gathering basic qualifications, and delivering referral requests for the wholesale lending program we have developed into our lending network and we call this process collectively “LeverageLine.”
By proceeding to use the A. B. Nicholas site, you understand that you are accepting all statements on this page as full disclosure and you are foregoing the right to claim at any time in the future that ABN has held itself out to be a lender, stock broker, financial advisor, tax advisor, or employee of one of our licensed lending institution partners.
FINRA Membership: The phrase “FINRA member” means that the participating institution or individual is a member of the Financial Industry Regulatory Authority and is in good standing without any reprimands, disciplinary actions, or otherwise. These are the only lenders and advisors that A. B. Nicholas allows to bid on our clients applications. (The FINRA website is located at www.finra.org). Individual institutions and advisors with whom ABN works can be verified on www.finra.org.
Strict opposition to “nonrecourse stock loans. ”Our position is therefore that there is no form of nonrecourse stock loan in the market today that does not pose an unacceptable risk to a client investor. We at A. B. Nicholas work exclusively with fully licensed, SIPC/FIDC-member financial firms who are likewise staffed with FINRA-member advisors with appropriate licensing (e.g., Certified Financial Planners, Series Brokers, Registered Investment Advisors) and that offer full disclosure and transparency on every element of our clients’ securities-based financing.
We work only with non-transfer-of-title programs where shares are never sold in order to fund the client’s loan. Our loans are full recourse to the securities portfolio (the underlying collateral asset) as any legitimate loan program of any kind is. We offer no other types of lenders or programs; nor do we ever act in any way or at any time as mortgage brokers. LeverageLine is not a mortgage nor, as stated above, can it be used to purchase a primary residence.
Fees: ABN is paid a fee for its services by its clients only if we have successfully delivered LeverageLine to your satisfaction. The requested fee is normally between 1 and 2% of the total authorized credit line amount, and is payable from the credit line, by ACH, or by credit card. There are no up front or extraneous fees.
Once ABN has delivered as promised to the satisfaction of the client, its compensation will be deemed to have been fairly earned except if the financing as quoted is withdrawn through no fault of the client. By proceeding with your application, you agree that if ABN has fulfilled its role as stated herein, that its fee will have been fairly earned and is thus payable.
Impartiality: ABN is not compensated in any manner, at any time, for any reason, by or through any lender or financial firm, directly or indirectly, for any action or lack of action, which includes all of the regulated and licensed SIPC/ FINRA-member firms and their advisors who provide lending services to our clients.
Our company is built upon integrity: our impartiality policy is unbending and firm. The delivery of a particular lending facility, therefore, represents a facility that we honestly and in our best professional estimation believe to be the best offer of its kind; there can be no other reason for the delivery of terms from any of our lending partners.
No Advice by Any Related Party: ABN at no time provides investment, tax, buy-sell, or any other type of financial, investment, insurance, or tax advice. Any mention of taxes or valuations of any securities must not be construed as advice and no client may use such statements as a prelude to any tax or investment decision.
Nothing any ABN agent or staff member says or does should be construed as investment or tax advice; consult only with a licensed advisor in client’s state for information that can be used for decisions in these areas.
Defaults: For these stock loan | credit lines, a simple lien is placed on the account, and the client may continue to trade in the account as long as the securities’ value remains within lender’s required value ranges as asset-based financing program collateral. Clients must ensure that their collateral stays within the lending institution’s value requirements. The lien is only exercised if the client defaults on obligations and makes no acceptable alternative arrangements to repay the amount owed. This is standard for any variable-value asset-based loan and not particular to LeverageLine.
No Obligation: No client is required to proceed with any credit line program offered through or by ABN, its staff or associates, even after opening their new account at their lender. Obligation occurs only when a client has opened their credit line and drawn funds, and that obligation is to repay what has been drawn. The ABN fee is also due and payable within one day of the opening of the line after ABN has carried out its task as promised and delivered the like as described.
ABN Rejects as Unqualified:
- Any private placement lending facility, or any facility that takes title to the securities; and/or
- Any facility that requires the securities to be transferred or pledged into another party’s name or control; and/or
- Any lending facility that is not licensed and fully regulated; and/or
- Any advisor with any disciplinary actions currently or in the past; and/or
- Any facility, company, or individual that sells client securities to fund credit lines wholly or in part; and/or
- Any form of nonrecourse lending; and/or
- Any client who seeks to use this funding to avoid the lawful payment of taxes or other federal or state obligations.
Not a Signatory: A. B. Nicholas is not a signatory to any financing contract for any program offered through this site other than the initial intake application at www.abnicholas.com/quote. Any client proceeding to apply for a LeverageLine accepts and understands this statement without reservation. All financing is by and through a fully licensed partner firm and agent.
Testaments: ABN does not manage portfolios of securities at any time; has no contact with or responsibility for client assets; and has no fiduciary or other interest or responsibility of any kind in or for the management or outcome of any of the securities used in any of the financing programs ABN facilitates through its referral network. All final decisions regarding financing offered through this site are the sole and exclusive right and responsibility of the client in conjunction with the licensed representative(s) of his licensed lending institution and any other duly licensed advisors the client may choose. By proceeding to use this site you are acknowledging that you understand and accept this , and all other statements in this Disclaimer, without amendment.
Exclusivity of Role: All lending responsibilities and activities are therefore exclusively handled through the licensed, FINRA-member lending parties to whom ABN refers its clients and with which ABN has partnered. ABN focuses exclusively on sourcing and support services and does not and will not offer any form of securities buy-sell or tax advice. All clients are urged to consult with a licensed tax or financial planner in their state of residence if they are in need of these ancillary services, although your licensed lending institution will have facilities to serve you as well if you wish, likely at a discount for coming through A. B. Nicholas to them.
Tax Responsibility: Tax treatment of all loan or credit line proceeds are the sole responsibility of the borrower and ABN cannot, does not, and will not provide any tax advice at any time nor is any staff member or agent authorized to do so. Decisions made regarding the tax treatment of any financing provided by or through ABN, its staff or associates is therefore the sole responsibility of the client borrower in conjunction and conversation with their licensed CPA or other licensed legal/financial advisor, notwithstanding any mention of any tax-related issues on the ABN website or in any document. Any statements on any page or document produced by A. B. Nicholas that include any reference to taxes must therefore be treated only as broad generalizations and no tax or investment decision should be made from them. Always refer to a valid licensed tax or investment expert prior to making any tax-related decisions.
No title transfer: All accounts used in any funding through the ABN website or personnel are titled solely to the securities owner. Title – which means full legal ownership and the right to sell for any reason – does not transfer during the loan term to the lender or ABN and no shares are sold through any ABN programs to fund any loan offered herein. (See above for risks of portfolio value decline). Therefore, unless the client him/herself so chooses to sell securities or the client has defaulted on his loan obligation and refused to make any acceptable repayment arrangements, no sale shall occur.
If the client should default on their loan and make no acceptable repayment arrangements, the lending institution may, by virtue of the loan agreement, compel a sale in order to effect repayment of funds extended to the client.
Client retains the right to sell or trade shares while they secure the LeverageLine provided that the trades are conducted via their licensed lender advisor and do not diminish the quality or value of the portfolio. It is possible that a small charge may be levied for any sales.
Illegal Use: Credit line funds many not be used for any illegal purpose nor for the purchase of marginable securities per US FRB banking and securities regulations for non-purpose credit loans like LeverageLine with LTV up to 95%. Proceeds of ABN credit lines may not be deposited into any brokerage account directly which would imply intention to buy further marginable securities in violation of this one rule.
No Mortgage Brokering: ABN is not a mortgage broker and does not hold itself out nor engage in any activities of a mortgage broker or primary residence financier, or mortgages by definition for real estate of any kind. Downpayments or normal investments in building etc are fully acceptable of course. Any use of loan proceeds for commercial real estate/real estate investment applications, therefore is the sole responsibility of the borrower and client is expected to comply with this rule.
No Affiliation: ABN is not affiliated with the SIPC, FDIC, SEC, IRS, FINRA, or any of their subsidiaries even if listed or stated on the A. B. Nicholas website.
BBB Rating: ABN is rated “A+” by the Better Business Bureau. Please refer to these organizations’ websites for information on their services and programs. A. B. Nicholas does not own any trademarked information belonging to the Better Business Bureau.
All visitors to this site are required to read and agree with this Disclaimer before proceeding.
Agreement to the Foregoing by Applying: Proceeding with your application on our site, including any form of contact with ABN staff, or any application for any A. B. Nicholas product or service, assumes you have read, understand and accept the above statements. If you do not understand or agree with any of this Disclaimer, please feel free to inquire at [email protected] or to call us at 202.379.4744 ext 1 before proceeding with any application for financing from A. B. Nicholas.
Please do not proceed with this site or with any loan programs herein unless you accept and understand this Disclaimer. If you do not accept and agree with this Disclaimer, ABN cannot proceed by law to provide any services to you. In that case, please feel free to exit to Google here.