Effective June 6, 2019, A. B. Nicholas Securities Finance is implementing a new processing structure for all transactions designed to expedite funding for our clients and our referral agents.
In the past, clients applied via our online form which went to our licensed lending partner for a quote. The quote was then relayed to us at A. B. Nicholas, and we embedded the quote in a two-page term sheet with an expiration date approximately one week later. The client would digitally sign the term sheet prior to the expiration date, and at that point we would put the lender advisor at the licensed lending institution and the client together to proceed.
Part of this process included input from our agents on the total fee they preferred to include in the term sheet. At times this figure was too high; at other times, too low. Occasionally it was accurate, but it was a guessing game in any case.
Now we will be taking two important structural steps to improve overall loan processing. First, every secure online application will also include the fee agreement, meaning we will no longer issue separate term sheets. The application will be the client’s agreement to pay our fee if and only if they choose to proceed to funding, and then only after their funds have been delivered as promised. But the agreement to pay will be at the front end, obviating the need for any other documents to delay the loan process.
Second, unless the client chooses to speak with us beforehand (not required) here at A. B. Nicholas, upon receipt of the client’s application we will immediately route the client to one of our licensed lending partners who will create the custom program per A. B. Nicholas guidelines (wholesale terms, no mandatory fees, above-market LTV, etc) that the client requires. ALL activity related to the client’s financing will therefore be handled 100% by the licensed lending institution and advisor from the start.
All other aspects of the process will remain the same. The application form will still capture all Agent clickthrough codes to ensure crediting. The lending institutions will update us regularly here at ABN on the transaction’s progress, which we will report into your Agent Portal and it will automatically advise you of an update to your client’s record. Fee payment and disbursement to our Agents will remain unaffected.
But a final major structural change, on advice of our institutional partners, will also be implemented. (Note: this does not affect any transaction currently underway, only all applications/transactions going forward from June 6, 2019): We will be using a fee scale tied to the size of the client’s line of credit, and in the above-mentioned LeverageLine application the client will be agreeing to the scale. The final line of credit amount will be arranged by the licensed lending institution and the client one-on-one; we will be apprised of this, and we will invoice the client, payable within one business day of the opening of their credit line and availability of funds, based on the final credit line authorization.
This system allows maximum flexibility for the lender advisor; greater likelihood of closings when the lender is free to adjust to the client’s needs freely in real time; and it removes the problem of clients taking ABN term sheets to their existing brokerages to use as foils for counteroffers at our (and our agents’) expense. It also makes the client-to-lender continuity more smooth with fewer moving parts, which is more in tune with compliance rules as well.
The new pay scale is on the www.abnicholas.com/quote page. Should you have any questions, please feel free to call Dan at 202.379.4744 Ext. 1, or contact us by email here.