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 a significant percentage of any gain you may have received on the increased value of your holdings. Or perhaps you really hoped to keep your stock portfolio into your retirement years. The threat of increased capital gains taxes by lawmakers at certain thresholds might only mean more of your cash out the door.

If these describe you, then we suggest that you consider the A. B. Nicholas securities finance network.

Small business finance doesn’t have to just be about a laborious, red-tape-loaded SBA loan. In fact, more people are aware that these loans put all of their assets in jeopardy and are not happy about it. Do you really want to put your house up as guarantee for your small business finance plan? For many borrowers, the answer is a flat “no.”

But what if your plan included a competitive, low-interest, high-release credit line that allowed you to “be your own banker” and draw cash for your business as needed? Where you pay back the loan interest only, until such time as your business is on its feet and you can begin contributing to the principal — all on your schedule, not that of the banks….

This was but one of the factors that led us to launch the A. B. Nicholas securities finance network. We thought it was unfortunate that the typical investor with $100,000 or more in a securities portfolio had but two choices: Leave their stocks alone, or liquidate them. Clients who desperately needed the cash actually saw their choices as one only: sell the portfolio.

Any small business finance plan that includes the requirement to eliminate one’s investment objectives just to start a business is likely to be gut-wrenching at the very least. It could mean a complete reorganizing and re-evaluation of your retirement plans, for example. Or funding a family member’s college hopes.

Let us be clear: we are not contending that an SBA loan is automatically too much risk, or that you should not apply for one. But we think that if any small business finance plan forces you to include an involuntary liquidation of your stock portfolio, then it is just not likely to be a good plan overall.

What are the advantages of the A. B. Nicholas LeverageLine, then? Many.

First, your liability will be limited to your stock portfolio, not your house, your college fund, or any other asset you may own. Your securities portfolio alone is your collateral. This gives our clients a measure of peace-of-mind that is not likely to be present when the borrower has only an SBA loan as their option. Suppose despite your best efforts your business goes south? The government could take virtually everything if the loan goes into default.

Second, you’ll almost certain just get a non-competitive default interest rate from the bank underwriting your SBA loan. Depending on the bank, this could involve relatively high interest, extra fees, penalties, etc. that are not present with the A. B. Nicholas network. Your credit is at risk too. Not so with our program.

In fact, small business finance that makes our LeverageLine a centerpiece of financing will benefit from the power of competition with A. B. Nicholas. Our goal is to put your portfolio up against as  many licensed, FINRA-member lenders who have agreed to work with us as possible so as to deliver the lowest possible interest rate in the market to you and thereby, in theory, save you (we hope) a good deal of money.

You typically will be forced to take the full amount of your SBA loan, all in one lump sum. And though repayment is more lenient with an SBA loan than say, a car loan or a mortgage, it is still much less personalized than the custom credit line our lenders can offer.  For example, your SBA lender may cap that amount you can borrow to purchase your business at a figure that doesn’t allow you to purchase the business or site that you had in mind. Our network, by contrast, will give you the freedom to draw as much or as little cash as your holdings allow, up to 90% of loan-to-value depending on the quality and volatility of the securities within your holdings. Most borrowers get 75-80%. Most draw what they need only, when they need it.

Third, our network lets you access some of the biggest licensed public U. S. banking and brokerage institutions without having a pre-existing account therein. All we require is that you are the legitimate owner of the portfolio. The institution where you currently hold your assets is not a factor.

If you were to take your securities and  move them on your own to a new, lower-interest, better service bank, the process would likely be laborious, with no guarantee of obtaining a good stock loan rate. Mandatory fees, restrictions, and penalties are certain to abound. The bank is not set up to compete on rates or the amount of small business finance that they can offer. They are restrained by institutional rules from deviating from their playbooks.

Not so with the A. B, Nicholas Securities Finance network. Here it is simple and straightforward. You have a brokerage statement, we get you offers. Simple as that. If you don’t like the offer, you don’t have to take any of them and we charge you nothing. You walk away with a free education in what the market can offer. That’s right — we’ll do the work to get you the best rate and terms, but you only pay us at the end after we have performed as promised, and even then it is  normally only a nominal .5-1% of the credit line amount our network will have been able to obtain for you.

Finally, your small business finance plan might require a measure of speed. Good business sites often go quickly; great prices on businesses you are eyeing will attract buyers who can act more quickly. Unlike most any government program loaded with paperwork and restrictions — what is referred to as “red tape”– our program has no such bureaucratic impediments. Your credit rating is not a factor, for example. All we ask is that the stocks, bonds etc. in your portfolio qualify (sufficiently high volume of activity for your stocks and a price consistently about $5/share see abnicholas.com/requirements) —  and that’s it.  Most of our clients have their funds ready to draw in about five business days.  Compare that with the typical personal or SBA loan which can take upwards of three months or even more in some cases.

When all is said and done, A. B. Nicholas offers a free service to allow clients to see what the market offers. We let you see, for free, what competition can deliver to you. You can take our offer or decline it at no cost to you. There are no processing fees or other such hidden costs. You pay us a very nominal fee — which can be paid from your new credit line if you wish — and that is all. Your A. B. Nicholas network lender will never dun you with fees or perform a hard-sell push to get you to buy more investment products. You came for a loan against your stock portfolio; that is all they are authorized to provide to our clients unless our client wants further services. Coming through A. B. Nicholas, even those are likely to be offered to you at a discount over what is offered to retail clients.

So that’s it: Simple, low-cost, competitive, licensed, flexible. A program designed to save you the maximum amount on your stock loan interest. Carefully chosen, top-tier public institutions and advisors in the network.

We think it should be a no-brainer for anyone contemplating a margin loan or the liquidation of their securities holdings to fund a business: see what the A. B. Nicholas network offers. There is no downside to seeing what the market can offer you. After all, why pay through the teeth with a small cash release and high rates just for the convenience of using your existing brokerage? Is convenience worth that much to you? If yes, and losing money is OK with you, then you won’t want to apply here.

But if it isn’t, we urge you to consider submitting your brokerage statement to us for lender review via our secure application form (abnicholas.com/quote). Because here at A. B. Nicholas, we feel confident that you’ll be grateful that you approached your small business finance plans by including our tested services in the mix.