Disclaimer

By proceeding with any application for any services from A. B. Nicholas you are stating that you agree without amendment that you have read the following Disclaimer; please read carefully and call 202.379.4744 if you should have any questions.

Summary

A. B. Nicholas LLC (ABN) provides information, research, business consultation, and related support services to clients seeking competitive, no-sale-to-fund, non-transfer-of-title credit lines via licensed U. S. institutions, specifically financing against free-trading, marginable stocks, bonds, and mutual funds at wholesale rates with specific terms required by our clients. ABN’s services are tailored to our target markets: franchisee and commercial real estate. But our clients are free to use their credit line proceeds for any legal purpose other than the purchase of more marginable securities.

ABN has used its experience and knowledge of our target markets to obtain a specific, customized wholesale credit line with terms offered via one of several fully licensed, fully regulated, U. S.-based lending partners.

All A. B. Nicholas lenders and advisors are within major U. S. -based institutions and have agreed to make their lending facility available to the individual clients we serve. No member of A. B. Nicholas, its staff or agent affiliate force or partner organizations is compensated in any manner by any of our licensed lending institution partners, nor is A. B. Nicholas holding itself out at any time as an employee, broker, or consultant for any of these lending institutions.

We do not handle any securities; provide any advice on the buying or selling of any particular security. We offer an introduction to a facility that meets the lending needs, we believe, of our franchise, commercial real estate, and business buying clients. LeverageLine is NOT a mortgage.

This distance from our lenders is intentional as it allows A. B. Nicholas to act objectively at all times in pursuit of the optimum lending offer for our clientele. There is no advantage, financial or otherwise, for A. B. Nicholas, its staff or agents, to route our clients to any particular lender. Our mission is to find the best securities-based financing we can.

How Interest is Determined

All LeverageLine interest rates are variable rates, based on a discounted “house” rate (an institution-determined figure based on various indicators) that is keyed to the size of the credit line offer; to this is added a small increment based on 30-day (monthly) LIBOR. (See the 30-day LIBOR rate on any of the major financial sites, including Bloomberg or Bankrate;  the rate has remained within a relatively small range of variance over the last seven years.)

You may also opt for fixed rate financing if you wish. Inquire of your licensed lender advisor if this is of interest.

Is Securities-based Borrowing Right for You? 

Any activity involving stocks, bonds, or other securities involves at least some degree of risk. Securities-based borrowing also involves certain risks and therefore may not be suitable for all investors. If the market value of pledged 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 can involve a sale of stock), or  pledge additional eligible securities in order to maintain your loan.

Although both A. B. Nicholas and each lending partner advisor make maximum effort to ensure only stable, quality securities are accepted as collateral (see our 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 advisor at all times, 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.

In the very worst case of a falling portfolio for which you have not cured a deficit in collateral value, nor made any acceptable 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 unlikely, the fact remains that it is possible when dealing with securities of any kind. As always, the sale of any security may cause a federal or state tax consequence if the basis for your stock (your purchase price) is significantly lower than the selling price.

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. In addition, your lending institution does not take title or ownership of your securities as a recondition 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.

Further:

  • LeverageLine many not be used to fund an immediate primary residential home (although it may be used for any investment property, regardless of future status) nor may it be used to purchase more marginable securities. It is not a mortgage.
  • 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, therefore, 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; and that you will 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.

Licensing

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. 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 this lending.

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. 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 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 markets, 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.

Affiliates/Agents Restrictions

Agents of A. B. Nicholas my not receive fees from their own transactions, and therefore may not register as agents for any referral other than for their own financing. Agents may not receive fees outside of the ABN fee for any ABN LeverageLine transaction.

Lending Partners

Our lending partners are all major, top-tier, fully licensed “household name” U.S. institutions; that is, well-known, public, regulated brokerages and banking institutions in good standing, with audited financials as required of all publicly traded companies and FINRA/SIPC/FDIC registration in good standing.

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 any state for which they are not 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 on a case-by-case basis. If any adviser is not registered to provide 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 no negative reports or disclosure events and at least 15 years in the industry.

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 lending consultant for the franchisee and commercial real estate market only, performing research, gathering qualifications, and creating openings to the feature-rich, tailored wholesale lending program we have requested and which is termed 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 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, employee of one of our licensed lending institution partners, investment advisor, or tax advisor.

FINRA Membership: The phrase “FINRA member” means that the institution or individual is a member of the Financial Industry Regulatory Authority and is in good standing without any reprimands, disciplinary actions, or otherwise. The FINRA website is located here. 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 for successfully delivering the LeverageLine lending facility that we have painstaking researched, built, maintained and promised.  A term sheet is generated and each client agrees by their signature to pay a fee only upon the successful opening of their line as stated.  Fees are therefore only due upon successful opening of the client’s line of credit as agreed, although a discount option, never mandatory, is also offered. Once ABN has delivered as promised, its compensation will be deemed to have been fairly earned except if the financing as quoted is withdrawn or changed substantially 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 feel will have been fairly earned.

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 arrangements to repay the amount owed. This is standard for any asset-based loan.

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:

  • Any private placement lending facility or any facility that takes title to the securities; and/or
  • Any such facility that requires the securities to be transferred or pledged into another’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 the credit line 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.

No Signatory: A.B. Nicholas is not a signatory to any financing contract for any program offered through this site. Any client proceeding to apply for a LeverageLine accepts and understands this statement without reservation.

Summary: ABN does not manage portfolios, has no contact with client or responsibility for client assets, and has no fiduciary or other interest or responsibility of any kind in/for the management or outcome of any of the securities used in any of the financing programs ABN facilitates. 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.

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.

Taxes: Tax treatment of loan or credit line proceeds is the sole responsibility of the borrower and ABN cannot, does not, and will not provide any tax advice at any time. 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 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 includes any reference to taxes must therefore be treated only as 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 – does not transfer during the loan term and no shares are sold through any ABN programs to fund any loan offered herein. 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 repayment arrangements acceptable to the lender, 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.

Illegal Use: Credit line funds many not be used for any illegal purpose nor for the purchase of marginable securities per US FRB regulation for non-purpose credit. Proceeds of ABN credit lines may not be deposited into any brokerage account directly. LeverageLine is not a mortgage for a primary residence and cannot/should not be treated as such.

No Mortgage Brokering: ABN is not a mortgage broker and does not hold itself nor engage in any activities of a broker or primary residences or mortgages for real estate of any kind. Any use of loan proceeds for commercial real estate/real estate investment applications is the sole responsibility of the borrower.

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.

All visitors to this site are required to read and agree with this Disclaimer before proceeding.

Proceeding with this 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 support@abnicholas.com or to call us at 202.379.4744  before proceeding with any application for financing from A. B. Nicholas.

Please do not proceed with this site or with any loan programs herein if you do not understand, accept, AND agree in full with this Disclaimer. If you do not accept and agree with this Disclaimer, ABN cannot proceed to provide any services. In that case, please exit to Google here. 

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