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A LeverageLine is a custom, personalized credit line that uses your stocks, bonds, mutual funds or any other publicly traded non-IRA securities as a simple asset guarantee for a very competitive credit line in which two or more licensed stock brokerages compete for your business, a system we believe can provide the most competitive terms for our clients. It is not a conventional 50% LTV margin loan, which is designed principally for single stock positions, and was intended originally to be used solely to purchase other securities, not as a conventional line of credit though some may use it that way nowadays if their institution permits it. LeverageLine offers LTV of from 70% to 96%, permitting more cash typically at lower rates.
The securities within your portfolio should have a cumulative value of at least U. S. $85,000 at the time you apply.
The stocks, bonds or mutual funds cannot be in an IRA or 401k.
The collateral securities should be trading at $5/share or higher, consistently, over at least four months with trading volume valued at a minimum of $1M per day.
Your securities should all be free-trading (no private stock),
If you have a margin loan on them already, your lender can pay this off for you in advance and roll the portfolio into a new, higher-LTV, lower-interest LeverageLine stock loan. .
You may use any combination of stocks, bonds, mutual funds, cash, or other eligible securities. They will be averaged together to determine your collateral’s value.
No. A. B. Nicholas in designing this lending facility has required that its clients have no mandatory account management fees as a precondition to funding; this is a fundamental feature of our program. Our clients come primarily looking for loans, not ancillary services, so none are required.
This can be a significant savings to our clients, as mangagment fees can range as high as 3% per annum. A. B. Nicholas clients pay zero in fees to their lender, unless they choose additional services or professional account management. If so, our lenders offer deep discounts on those services since you’ve come in as an ABN customer.
Apply through our secure online application form. You will need a copy of a recent brokerage statement and a picture ID. All documents and information from the application are purged and overwritten for client security after use by your licensed lender to provide your quote.
View our Process page for more detailed information on our easy, secure application procedures.
We only accept applications via this secure application form. We do not accept applications by email, fax, or over the phone. Following delivery of your quote, you’ll speak directly with a licensed FINRA-member executive at your lending institution at which point you may choose to proceed if you wish. At no point is there any cost to apply.
Your LeverageLine stock loan is callable; in practice, however the lending executives at the major U. S. institutions with which we work always set your loan-to-value very carefully based on its price history. Still, a call within our program will always come with the maximum options to shore up value, pay down the line, or restructure out of a disproportionately-represented (in a multi-stock portfolio) falling stock in your portfolio that may be adversely affecting the overall value of the collateral. Our lenders do everything they can to avoid a call. This is not likely with a typical brokerage margin loan.
Your lender has taken steps to minimize that risk to the extent possible, and it begins with the LTV offer you receive when you apply. Every stock in the portfolio is carefullly analyzed and weighted for risk, which is reflected in the loan-to-value of each stock before averaging all of the securities together. This means that one falling stock need not necessarily affect the overall collateral value if other stocks are offsetting it (as noted, the average of all the securities is used to set the collateral value for maintenance purposes with LeverageLine.)
Your loan-to-value is set at a point that the lending institution’s risk analysts believes to represent a reasonable risk; the last thing your lending brokerage wants is a call.
Client satisfaction is critical to us here at A. B. Nicholas Securities Finance.
Yes, you can have both SBA and a stock secured loan like LeverageLine simultaneously as far as your LeverageLine lender is concerned.
Our LeverageLine program has been especially popular franchise and real estate investors. Because of its flexibility, it is also used by families with college-age children to reduce their reportable income for financial aid purposes and thereby become eligible for aid. (Inquire for more on this).
Your carefully selected licensed lender adviser is experienced and easy to work with; he/she will always aim to meet your specific requirements and special conditions if they arise.
Both fixed and variable rate-based LeverageLines are avialable, though our most competitive loans are the latter. Variabe rate LeverageLines are based on 30-day LIBOR plus a discounted lender premium based on the size of the line. (See the current 30-day LIBOR rate on any of the major financial sites, including Bloomberg or Bankrate; apply for a LeverageLine to see the composite APR.
If you opt for a fixed rate LeverageLine, although the rate is usually higher.
No. You will not be required to give up the ownership of your securities in any manner, or to sell your securities, as a precondition to funding.
If you should default on your loan the lending institution will have the right to compel you to come up with the amount due, or if that is not possible, require you to sell sufficient securities to cover the lender’s loss.
If your securities portfolio grows in value over time, the maximum credit that you may draw from the line will increase along with it. You may request an increase in your line if your portfolio should show the requisite stable increase. Minor or temporary price increases will not normally affect the overall loan authorization.
Although the increase is not automatic, if the portfolio as a whole shows recognizable growth over time (not just a short-term or temporary flux), your higher credit authorization is likely to be approved. Simply contact your licensed lender advisor to request an increase.
When you have an unusual or non-standard situation involving things like partnership ownership of securities, trust ownership, etc, we can often get it done at ABN.
However, we cannot take 144 Restricted stock, or stock held privately (as opposed to trading freely on a major market like the New York Stock Exchange).
Become an ABN referral agent. If you have an existing network of potential clients and a clean background, we’d like to here from you. We especially welcome practicing professionals in finance, real estate investment, business capital formation, or any related field that interfaces with potential LeverageLine clients.
Note please that after applying all Agents must comply with ABN and lending institution rules, and must take a short 1 hour training & test for certification per institution rules. (See more here).
Stocks, bonds, mutual funds, ETFs, non-corporate bonds, REITS, UPREITS, and most other kinds of unrestricted securities trading on any major U. S. exchange at $5 a share or higher.
Please note that we do not accept medium-term-notes (MTNs), letters of credit, foreign bonds, real estate/mortgage-based bonds, or securities that are in an IRA, 401K or Keogh plan, as collateral for the LeverageLine program.
You are basically simply changing your account, short or long-term as you desire, for the sake of obtaining a superior credit line. Our partners offer higher-end online trading tools as well if you wish.
No. For our standard variable rate LeverageLine, no penalty of any kind is assessed as there is no maturity date, LeverageLine being more akin to revolving credit card.
But a penalty based on the remaining months of your loan term is assessed for the fixed LeverageLine, should you exit before the term matures.
Yes. A. B. Nicholas developed this particular custom facility at much expense and time, and we charge a nominal fee based on the maximum line we will have delivered, as promised, to you, typically 1=2% of the maximum credit line authorized, payable from the line of credit if the client likes.
Please note that the fee is due only after your line of credit is open and we have delivered as promised.
For fee-related questions, please write Marie Wood, Operations, at [email protected] or call Marie Wood, Operations Manager, at 202.379.4744 Ext. 2.
We welcome your calls or emails at any time. If you reach us after business hours, we will get back to you promptly on the next business day.
You can reach us between 9AM and 8PM Eastern time, Monday through Friday, and 10AM to 1PM Saturday at 202-379-4744 or via our secure contact form at any time. We respond to all inquiries promptly.
Organizations that would like to be partnered with A. B. Nicholas can contact us at the above coordinates as well.
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Get more information about our stock secured loan programs by sending us a message. You can also contact our live support during normal business hours (M-F 8AM-6PM).