Help and FAQ (Frequently Asked Questions)
How do I apply?
Use the Get Quote button at the top right to access our secure online form. We do not require your social security number and do not perform any credit checks with your application. There is not charge to apply. Attach a recent brokerage or bank statement and a driver’s license or other picture ID to verify identity, and that is all. Approximate time to complete: 5 minutes.
Who are your lenders?
A. B. Nicholas assembled a group of top-rated, fully licensed FINRA-member advisory executives covering a growing list of institutional stock brokerages and banks, including UBS, TD Ameritrade, E-Trade, Charles Schwab, and Morgan Stanley. Each has agree to offer a stripped down, credit-line-only financing program collateralized by your stock, bond, REIT or mutual fund portfolio. Each have agreed to charge no additional fees beyond the interest on the principal you have drawn from your line. You are provided with your lender advisor’s FINRA background info link at the outset.
How long does it take on average
to receive my loan funds?
Every case is different, but for most clients with stock portfolios and no issues related to ownership (e.g., divorce, court) your funds should be available in about 7 business days.
How are you able to deliver lower
interest rates and better LTV?
Our business model is based on two elements that reflect the preferences of our borrower clients. First, LeverageLine lenders must offer a credit line only, not account management, investment advice, financial planning advice or other services (or costs) bundled into the loan process as is the usual case for any walk-in client at most brokerages or banks. Our clients in essence get the best lending services of existing private banking clients, without having to have a pre-existing account within those institutions when applying. Second: We send our client applications to as many of our lending partners as possible, the exact number dependent on the size and type of securities in your portfolio. This system has historically allowed us to make offers that are far more competitive than similar retail banking or brokerage offers, with all the same security, licensing, and expertise you’d expect from any modern financial institution.
What is REITLine?
REITLine is a unique lending program created in house with one of our Advisors, a finance Phd, who wanted to crack a difficult problem: Since many real estate deals involve payment with UPREIT tax-deferred securities, how can a client obtain cash from those securities without having to 1) convert them to taxable REITS and 2) Selling them. Conversion meant that they would become taxable, and costly. How to get cash from the UPREITs without converting or selling?
We devised a program that could deliver up to 50% of the UPREIT value in a loan program that would not require conversion of the UPREIT Operating Partnership Units. Result: Real estate investors can still receive payment in UPREIT OPUs for their real estate sales, AND obtain some liquidity from them without a conversion or sale. View our REITLine Video here.
Can I Use My LeverageLine and
still get an SBA or other loan?
Yes. You can have both. We recommend that you obtain your LeverabgeLine before you obtain your SBA or other financing, however, to prevent the securities from being liened by any other lender. But the securities should be reportable as an asset in most cases for qualifying purposes for any follow-on financing.
What are the differences between
fixed rate and variable rate LeverageLines?
Our standard LeverageLine is a variable rate product. This has several advantages for the client: 1) No maturity date; 2) Pay principal back any time; 3) Lower interest rate, based on 30-day LIBOR; 4) Draw as little or as much principal at any time up to maximum, and pay interest only on what you draw.
The fixed rate has 1) A set maturity date (e.g., 2, 4, or 5 years); 2) A fixed rate, payable interest only; 3) No payment of principal until maturity; 4) higher interest rates on average; 5) You must take the entire principal at once.
For the standard LeverageLine the principal may be paid back at any time in amny manner, monthly or at once when the borrower chooses to exit.
For the fixed rate option, borrower will repay the full principal OR roll the loan into our no-maturity-date variable rate standard LeverageLine at maturity.
98% of all ABN clients choose the standard, variable rate option, as rates have been relatively stable for several years and are not expected to change dramatically in the near future.
Can I become a referral agent for A. B. Nicholas?
Yes. We also work with existing companies that brokerage financial products. Got to www.abnicholas.com/agents to apply. There is a simple certification process required before fees can be paid to you.
Do you offer any other loan programs?
We do not offer any other loan programs. We specialize solely in securities-portfolios-as-collateral lending.