Over 4000 U. S. Agents & Counting
ABNicholas began as a company brokering financing for franchisees and commercial real estate developers. When the Great Recession hit in 2009, our lending programs, even for those with excellent credit, became much more difficult. We knew we needed to find another option.
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We're Growing, and Here's Why
After many years of working for the Department of Commerce’s International Trade Administration in Washington D. C., ABN founder Dan Stafford left his federal government position in 2001 to assemble a “can do” team of professionals who could find a way to offer a credit line using client stock portfolios that would be of special interest to franchisees and business buyers. After a year of hard construction work on the new financial tool, we were ready to open our doors with our LeverageLine program.
Securities (Stock Portfolios) as Collateral…What’s The Right Way?
Trained at the University of Chicago, Stafford had seen the difficulty that American expoerts were experienceing in exporting goods and services. Despite many federal programs to support U. S. businesses, many still had funding gaps that ended up with the companies abandoning the export markets. Few considered their stock portfolios, and so after establishing the original LeverageLine program, Stafford joined with SBA and Franchise funding expert Donald Johnson.
Our idea was a securities-based stock loan/credit line where the lenders compete with one another Lending Tree style to get our clients the best rates, terms and other premium features. We insisted that their offers come with no lender side mandatory fees other than interest on what the client chose to draw from their line.
To make it unique in the market, we needed a custom line of credit without the frills, service add-ons, or lender-side costs. We insisted that the standard mandatory brokerage management fees charged to clients be waived in full, because our clients were coming first and foremost for a loan, not investment advice. If they choose additional management or other services, that is fine; but such additional services beyond the loan cannot every be required.
“Just financing” were our bywords, but would any brokerage or bank be willing to forego all those lucrative fees? It took over a year to prove the model, but in the end it turned out that the answer was “Yes”. Our persistence had paid off.
Most of our A. B. Nicholas clients wanted financing-only, not expert investment advice. That was not easy; every brokerage and bank in the country was pressuring its agents to bring in cash via added-service fees. So after numerous turndowns, we finally located a licensed FINRA-registered advisor at Morgan Stanley with a background in commercial real estate. He understood our concept and was willing to give it a try. After tightening up ABN’s compliance parameters and tailoring the financial product to a pure, borrower-type market (not an investor market), LeverageLine began to grow in popularity.
In time we added Marie Wood, an expert in operations management, to handle our myriad paperwork and accounting for both clients and agents. We then recruited hundreds, then thousands of top-notch referral agents from some of the the biggest franchise and commercial business real estate brokerages in the country. We established a training and compliance program and certification process for all new Agents.
Today our staff and agents total over 4,000 in every state of the union, and we have processed over 400 million dollars worth of client portfolio loan applications while maintaining a perfect Better Business Bureau rating of A+ over more than a decade. Ours is a niche market — but it is a niche market we understand very well.
What’s in it for our licensed lending institutional partners if there are no mandatory lender-side fees? Simple. Any new accounts that come in, even if not managed, is calculated and credited to that Agent for purposes of bonuses. The more new LeverageLine portfolios he/she brings in, the higher that Agent’s bonus is going to be each quarter.
No company overview would be complete without discussing our clients, too, who helped define LeverageLine product from the start.
The type of clients we serve demanded no mandatory lender-side fees, very competitive interest rates, high loan-to-value, interest-only repayment, and speedy turnaround with a solid path to conventional financing later on. From our first major licensed lender-partner to our current three major providers and FINRA-member advisors with stellar backgrounds, the LeverageLine stock loan program was gradually able to achieve a wholesale-rate stock-secured-loan with an eye on the future.
Our staff at A. B. Nicholas is tasked, by agreement with our lending partners, with ensuring portfolio eligibility. For eligible portfolios (see requirements) we help prospective clients understand how the LeverageLine process works and answer any questions about their collateral stocks. We issue our term sheets with figures and approval from our licensed lending partners, and deliver the offer securely to the client. In this way, our term sheets are pre-approved financing quotes usually delivered within hours of application.
Our duties are simple: we confirm eligibility, answer questions, and move the application to the lending institution securely. We then build the lenders’ terms into a clear term sheet and deliver for signing via a secure, encrypted digital system. Once signed, we set up an introduction to their partner within the institution, the lender advisor — an experienced, licensed FINRA-member professional and an expert carefully selected for knowledge of securities-based lending services, franchise financing, and commercial real estate financing, with an impeccable record and multiple licenses.
A. B. Nicholas is, however, compensated a percentage of the maximum credit line, a one time charge similar to points on a mortgage, payable after we’ve delivered as promised from the credit line 03desired or by credit card. We carry out this work as a business enterprise service for our clients (not the lending institution) and receive no compensation or incentives of any kind from our licensed lending partners. Our duty is to provide the best securities finance we can, and nothing less.)
A. B. Nicholas serves many of the big franchise and business brokering firms, should they need a securities finance component for their clients. These firms trust A. B. Nicholas to deliver, and we are proud to say we do — every time.
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Institutional Advisor Team
Licensed Lender Advisors
Registered Agent Team
Registered ABN Agents
Organization Firm Team
G. Donald Johnson
President, A. B. Nicholas
Principal, Diamond Financial Services (NJ), 25+ years experience and business ownership in Business Finance & franchise lending, B.S. Fairleigh Dickinson University.
16+ years in securities finance. Prior: U. S. Dept. of Commerce, International Trade Administration.
M. A., University of Chicago
20+ years in business administration and accounting for financial firms. Director of Affiliate operations, applications, and services.