Our LeverageLine stock loan program is in fact a credit line that uses your securities portfolio as collateral. Engineered a decade ago by A. B. Nicholas originally for the franchise and business acquisition client struggling with the recession, the program today has evolved into a perfect tool for real estate investors and those who simply seek the best rates and terms available in a securities-based line of licensed, institutional credit.
We offer a number of advantages over standard margin loans and standard retail securities-as-collateral financing, including:
- Wholesale interest rates, below most other types of credit, below the rates for standard margin loans, and often same or below comparable retail or mortgage funding.
- Interest-only payment required and only on what you actually draw from your line.
- Revolving line of low-cost credit means no balloon payments or maturity dates.
- Credit not a key factor in approve. (Exceptions: no recent bankruptcies/foreclosures prior 5 yrs).
- Speedy delivery with a pre-approved financing Term Sheet, same day, in most cases.
- A simple background lien at your lending institution secures your loan; no loss of ownership.
- No mandatory lender-side account management fees and no interest charged until you draw.
- No sale of securities to fund your line of credit.
- You may defer your stock loan payments as long as you wish if you leave room on your line.
- Pay back principal when you wish as long as your account is maintained.
- ABN partnered with major U. S. institutional lender with experienced, FINRA-member advisors.
- Averages all securities in the portfolio to stabilize collateral, unlike margin loans (1 stock).
- Personalized, client-friendly lender-advisor seeks to keep you a satisfied client.
- Online access, freedom to trade (provided overall collateral value is not diminished)
- Creates financial relationship with a major institution, may be used for conventional credit later.
Keep Your Collateral
Our program does not require you to transfer title or ownership to your lender before you are provided with your funding, although you do need your account and securities to be housed at your lending institution. All activities are handled for you including movement of your selected securities into your own new brokerage account at your lending institution, with your permission.
Same As Your Current Brokerage Account
Your lender advisor, with your permission, handles the transfer of the securities you designate, institution-to-institution, into your new account so you need do nothing in that regard. Upon arrival and at the outset you simply have a new, modern, licensed brokerage account with online access at a major, household-name U. S. brokerage and banking giant, which we disclose on your term sheet in full along with your licensed advisor’s name and FINRA registration number. Since at that point your account is just like any other, if you were to decline to proceed that is all you’d have: a standard U. S. brokerage account. You control this financing, from start to finish.
A Simple Asset-Style Stock Loan
But if you do choose to proceed with your LeverageLine stock loan (and presumably you will – nearly 100% of our clients do!) then your credit line agreement will be waiting at your lender for your review and signature. Once signed, the institution creates your checking account in their banking division, and your line is ready for wire transfer or drawing down via checkbook. It might take an extra banking day to open the account after signature.
Interest Only on What You Draw
Until you choose to draw from your line, you owe nothing on your line; in fact, many of our clients simply like to have this low-cost credit line in their “back pocket” in case of future need. And why not? It costs nothing until you draw, and then it is interest-only-required. But even that can be placed back onto your line if you have sufficient room (credit draw room) left on your line.
A True, No-Ownership-Change Stock Loan
We state again the key distinction between the stock loans of past years and our LeverageLine program: there is absolutely no sale of your securities as a condition to funding. Thus, if you were weighing whether to sell stocks that you purchased at a much lower price originally (low basis) and are facing huge capital gains taxes if you did so, with LeverageLine you could access a significant amount – up to 90% in some cases – of your portfolio’s value without having to sell a single share to open your line.*
Want Other Services Too?
LeverageLine clients come looking for great financing first — not professional portfolio investment management services. We built this facility with that understanding, as our original clients were people buying franchises and businesses who only wanted loans that during the recessions, were almost impossible to obtain.
So those services (and fees) are always optional when you apply for a LeverageLine through A. B. Nicholas. And if you do desire portfolio management? No problem, your licensed lender adviser will be happy to assist. But since you came through A B. Nicholas, you’ll get the same or better to-notch management services as your current brokerage – at up to 1/2 the annual costs.
Get a free, no-obligation term sheet today. Let us show you what you qualify for and we can discuss your options. Email us today.