Lowest, Wholesale Interest Rates
Stock secured loan services that stood out from standard retail securities-based credit line programs; this is what A. B. Nicholas sought at our founding. We studied what was available at the time, back in 2009. What we found was that lender side fees, low loan-to-value, and very high rates prevailed. Fees were everywhere, from mandatory account fees to loan balance fees to ridiculous fees for the slightest of services – for example, withdrawing your credit line cash from the very same institution.
In fact, we found a market where the securities-based credit line was often handled in a profit-and-fees driven manner with many unwanted additional “services” mandatory, not with the client’s true needs primarily in mind.
A Better Stock Secured Loan
We sought to create a better stock secured loan, and in time with a lot of hard work and a bit of luck, our LeverageLine program was born. (A few years later, our UPREIT credit line program came along, too).
LeverageLine is a credit line using your securities portfolio as collateral, with no title or ownership transfer to the lender as a precondition to funding. It is less expensive by comparison with retail brokerages and banks. It offers strong privacy and security; expert institutional advisers with experience in franchising, business buying, and commercial real estate; and top professional support as you grow your businesses or real estate investments in the future — again, normally at no charge. In fact, our “No Mandatory Lender-side Fees requirement was one of the most difficult things to obtain for our clients. But we did it.
It may seem redundant, but at A. B. Nicholas you will bebe receiving lending services alone, which is presumably why you came to us. You are not shoe-horned into mandatory investment services. You certainly can opt for full-scale investment management with our carefully selected advisers at our institutional lending partners — and they are very good at what they do, plus you’ll get their services at an A. B. Nicholas discount over market — but that is up to you.
There are no mandatory “account management fees” or “service fees” or other hidden lender-side fees for services you may not want or need as a borrower. Also, with our LeverageLine securities-based credit line program you will not get the “hard sell” to adopt added costly services if you do not want them. What you will get is the lowest-rate, highest LTV securities-based credit line the market offers. Anything else is your choice alone.
A Stock Secured Loan, Not a Margin Loan
Perhaps you are thinking that our LeverageLine program is just a “glorified margin loan”. We assure you: it is not.
For example, a margin loan will almost always have rates as much up to twice as much as a LeverageLine. Your stock margin loan is standard with 50% cap on loan-to-value. It always comes with a very tight reserve maintenance policy as well. Standard margin loans operate on single securities, not for a portfolio or basket of securities where overall value averaged together as with LeverageLine.
With a margin loan, a fall in that single stock can quickly put your collateral into an insufficient status; if so, that would require you to shore up the value or sell shares shares immediately.
With our LeverageLine, you must maintain value too of course, but the value of your collateral is an average of all the stocks, bonds and/or mutual funds in your securities portfolio, so if there is a drop in value of one stock, it will be less likely to affect the overall collateral value significantly. For example, all things being equal, a drop in one stock could be offset by a rise in another in the portfolio, or the drop so averaged could be “absorbed” vis-a-vis the overall portfolio value.
The licensed lending institutions and advisers we have chosen to work with A. B. Nicholas are required to adopt a client-friendly policy where they strive always, to the extent possible, to ensure that all of your questions are answered in full, and that you are informed and in control at all times.
This isn’t just any stock secured loan program. LeverageLine has been customized for its core markets . It includes features that make it ideal for the commercial real estate investors too. These include
- Freedom to defer interest payments to preserve cash flow;
- Wholesale interest rates to minimize your overall cost of financing.
- Speedy delivery of funds to ensure that our clients can take advantage of opportunities quickly before they disappear.
- Pre-approval funding letters if needed to help facilitate deals;
- A lender policy of doing their utmost to become an active partner in each client’s success
- No mandatory account management or other fees unless you opt for extra services
- Freedom to trade in your account as long as overall portfolio value is not signficantly decreased.
Mostly, you’re getting a partner in your future business or commercial real estate growth. Or your overall financial needs looking forward, be they college tuition or an old tax liability. You are beginning with a very competitive, low-cost, asset-based, stock secured loan (LeverageLine) as an entrance point into what could, if you wish, become a long-term financial relationship with a major public financial institution.
So again… Why LeverageLine? Because it’s a powerful, custom financial tool loaded with features expressly designed for clients like you, not normally available on a walk-in basis.
Call us today: 202.379.4744; Or contact us to ask more questions by mail form. We’re always here to help!