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About The Global 4X Loan ProgramThis private lending program has been offered to select clients since 2005. it has funded a wide variety of projects and other lenders funding projects for everything from Commercial Real Estate Development and Technology Startups to Hotels and Resorts, to Mining, Infrastructure Projects and more. This program can be used for New Construction, Working Capital, Acquisition Rollups and Refinancing.
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4X Loan Overview
The 4X Loan Program is based on "multiples" of the borrower's "Initial Funds Deposit". The project owner (the borrower) is required to bring a minimum of €10M EUR (approximately $10.9M USD) to the loan. The loan is then 3 or 4 multiples of that initial amount.
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The 4X Loan Redefined
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JANUARY 2022 UPDATE
Until the end of 2021 the minimum amount of funds that needed to be raised to qualify for this program was only $1M USD. Now due to changes in requirements from our lending group's banking and insurance partners, as well as changes in the marketplace, effective immediately, the minimum amount of funds required for an Initial Funds Deposit to qualify for this program is $10M. This change makes it very difficult for us to work with project budgets less than $20M USD, unless the project is part of a slate of projects (one borrower with multiple projects). Today, our "multiples" based loan and small stand-alone projects, are no longer fit for this program. 
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HIGHLIGHTS
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How it works:In this program your capital is positioned as a "loan loss reserve" for your loan. This does not, in any way, place any lien, claim or encumbrance on your funds, it simply shows that there is the appropriate amount of funds "set aside" by the borrower. When the initial funds are positioned in that way, our lending group's receives a credit expansion from their banking partners on their existing credit lines, which they use to furnish your loan. In this way the loan is made possible due to the borrower’s "Initial Deposit Funds". In order to be meet all compliance requirements for a loan loss reserve, your Initial Funds Deposit must remain undepleted and unencumbered until your loan is repaid or otherwise settled.
It is possible to have your Initial Funds Deposit provided by a 3rd party, whether that be an investor or a lender. If you intend to repaying those deposit funds back from your loan disbursements you need to come in with a slightly larger deposit. The safekeeping mechanism used to protect your capital in this loan program ensures that your capital is never exposed to ANY risk whatsoever. In fact, your initial funds sit safely on the sidelines, in your own account, throughout the entire loan process and are secured and bonded with a 7% per year coupon. There are two ways to position funds into the bond, one requires you to wire the funds to one of the three custodian banks participating in our program - to be held in a non-depleting account in the borrower's name and the second is by keeping the funds in your account via a bank to bank (i.e. "account block") process, usually a CD or an SBLC is utilized for this. In this second method your funds are subject to an "inter-banking discount" of 20%. For example to pledge the minimum equivalent to $10M and keep them (blocked) at your own bank, you would need approximately $12.5M. See how your funds are fully protected in the "Financial Safekeeping" section below. |
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FINANCIAL SAFEKEEPING
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How The Borrower's Initial Deposit Is Secure:
The key element of the 4X Loan program to qualify for a loan, is the positioning of an "initial Funds Deposit". The borrower must have at least $10M already raised in cash or crypto. It is the borrower's project, coupled with their "Initial Funds Deposit" that makes this multiples based loan possible. The only requirement of those initial funds is that they remain completely idle throughout the term of the loan, so that those funds may be accurately positioned as the "loan loss reserve". If the funds were to become otherwise encumbered or depleted in any way, it would violate compliance requirements and cause the loan to collapse. As a result, to ensure compliance with all banking regulations as well as requirements from the wealth lending platform's insurance partners, there are specific methods and oversight required to guarantee that those funds will remain idle throughout the loan term. ABOUT THE BOND
The Investment Bank issuing the bond is an Australian Banking & Investment Corporation co-owned by one of the top 25 Banks in the world.. The Investment Bank is licensed through the Australian Financial Services License (AFSL, license number 3XXXX2) and is regulated by the Australian Securities and Investments Commission (ASIC). Due to Banking Compliance Restrictions on public websites, we are not able to name the Bank handling the pledging of your funds, the Coupon Bond, and the payment of your Interest here. But do know that the bank is the Trustee and Guarantor of the Bond which represents a formal debt to the borrower in the amount of their initial funds. Method 1. THE BORROWER'S INITIAL FUNDS ARE SECURED WITH ONE OF THREE CUSTODIAN BANKS AND BONDED WITH A FEDERALLY REGULATED COUPON BOND PAYING 7% ANNUALLY
When we reach the stage in the loan process where the initial funds must be positioned, the borrower and their team will be introduced to the Bond Issuer and once all of the borrower's questions are sufficiently answered, the bank will issue the borrower a 7% per year Bond Coupon. Once the borrower has confirmed and verified the bond through their own due diligence process, they will sign off on it, and wire their fully bonded funds to the bank to be held in a non-depleting account in their own name. This bond can be redeemed at any time, with 60 days written notice. However, if the bond is redeemed prior to the loan being repaid or otherwise settled, it will collapse the loan and result in its immediate call. Method 2. THE CLIENT PREFERS THEIR INITIAL FUNDS REMAIN IN THEIR OWN BANK.
If the borrower banks at a “Top 20” bank in an acceptable jurisdiction, their initial funds can be allowed to remain in their own bank account, under their control. This account must be set up in a way that still allows the loan multiples to be processed correctly. This would be accomplished by the borrower creating a brand new SPV that will never do anything but own that bank account. Then the lending group's bankers would work directly with the borrower's bankers to "hold" or "block" the account so that no encumbrance or withdrawal/movement of funds could ever be possible, in a manner that works for both banks. Once the borrower's banker notifies their client that they are satisfied that the funds are secured, one of our banking compliance officers would be added to the account as a signatory to have full access to the account to monitor it at their discretion. The borrower will have the assurance of their own banker that the account hold or block would prevent any signatory from moving or encumbering funds; if your bank has the ability to add multiple signatories to your account, you are also able to make it so that no single signatory would ever have the ability to act alone The only drawback to this method is that, since the funds are controlled by an outside banking entity, there will be an inter-banking discount of 20% applied. So for blocked accounts that are discounted, the minimum Initial Funds Deposit is €10M EUR after discounting requiring a deposit of €12.5M EUR. The multiple are on the discounted value. Method 3. SBLC or BANK GUARANTEE – Funds remain in the Borrower's account, their bank issues an instrument
Utilizing this process we can ONLY work with Top Tier Banks in highly stable banking jurisdictions and our Lender's receiving bank will discount the face value of the bank instrument. Using this method the borrower's capital will remain in their bank account, and their bank would issue the SBLC or BG. Keep in mind that the issuing bank will charge fees (often substantial ones) to create, issue, and eventually recall and liquidate this instrument, and those costs will be the responsibility of the borrower. Both banks (issuing and receiving) will set up the transaction in a way that the SBLC/BG will be held by the receiving bank until the loan is settled. The instrument will be returned in full value and without encumbrance. This will require the Borrower to obtain extensions to the SBLC or BG. Please note: this process is meant for clients that have a high level of sophistication in banking and finance, and who deal directly with bankers who have extensive experience setting up such these type of bank instruments. |
SUCCESSFUL FUNDINGS
Luxury Real Estate Development 4X Funding |
MidWestern Developer Afforded A Second Opportunity at Success
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When personal guarantees are required as part of institutional loans, occasionally the worst case scenario occurs. In the case of one Ohio developer that lost his development company and most of his personal assets through devastating bankruptcies in mid-2017, there seemed to be no possibility to rebuild previous success. Though still in possession of business plans for several $50M+ developments, bankruptcies and the terrible personal credit rating of the project owner prevented any chance of him attaining bank loans to build them. By making use of our funder's unique approach, the only collateral that needed to be pledged was the development project itself - no additional personal or corporate guarantees were necessary. With the 4X Loan Program the borrower's personal credit history became a non-issue. As long as the business plan was solid, the financing was to be made available. All that was required was for the project to find an equity partner that could contribute the initial 20% of the total budget;
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by placing that amount in a third party escrow as the Loan Loss Reserve, the project could achieve a loan four times that amount to complete the budget. A new SPV was set up to be the owner of the project and the borrower of record, and in Q1 2019 the equity partner was secured and the development approved for financing. Despite the banks being unwilling to consider lending to the project due to the credit history of the SPV owner, our funder is providing the bulk of the financing and monthly oversight to ensure everything remains on track. This luxury development is scheduled to be completed Q3 of 2020 and this midwestern developer is bing afforded a second opportunity at success.
You can see clearly from this example that our funder has the ability to finance loans that just wouldn't even be considered anywhere else... |
Michigan Based Cannabis Grower Leverages 4X Loan Providing Their Initial Deposit In COLD HARD CASH |
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As cannabis continues to be legalized at the State level across the US, the market opportunity is exploding. However, due to the fact that Cannabis is not legalized federally significant banking and financing challenges exist across the industry amid fears their legal profits could at a future time be reclassified as "proceeds of crime". As a result, many cannabis operators are hesitant to bank their profits, instead holding onto immense amounts of cash. Leveraging large amounts of cash to access growth capital for your business is not a typical approach to commercial financing.
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But for this cannabis grower it was the perfect answer. Using their profits (being stored in cash) they successfully leveraged the 4X loan. Our funder, being both a private lender and a problem solver figured out a way to get it done. In this unique scenario, the lender dispatched a secured armored car service to collect millions for a cash deposit for placement as the loan loss reserve. With the cash deposited in escrow, the borrower received a four times credit facility of the deposited amount. With their $20M+, they are expanding grow operations to several new states.
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They began receiving tranches in Q4 of 2018 and now with the loan fully disbursed, the client has the loan loss reserve returned to them - which had some significant benefits of its own. Thanks to this unique program, this Michigan grower is capitalizing on their expansion plans and their business is blooming.
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- SPECIAL ANNOUNCEMENT -
As of January 2022, the 4X Loan will no longer fund Cannabis.
Cannabis companies CAN participate as "Project Sponsors"
and help us facilitate more loans for a great benefit.
NEXT STEPS |
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When you confirm that you have access to at least $10M or higher - representing 25% of the amount you need to borrow already raised in cash for your initial funds deposit (minimum deposit is $10M (in cash or crypto) you can contact us to arrange to submit your completed Loan Request Summary package. This will include a completed LRS form, signing of our NCNDA, and your current Proof Of Funds, in addition to the required documentation for your project.
We will review your materials and be back in touch with you within 5 business days and if your project qualifies, we will provide you with our Finder’s and Financial Agreement for your review and signature and once our agreements are fully executed, we will present you with a formal Letter of Interest (LOI) from the lender that outlines the terms for your loan (subject to a full risk assessment of the formal application and intake package). At that point, if you decide to move forward with the loan application, we will invoice our engagement fee ($5,000 USD) and work with you to assemble and complete the loan application and intake package. |
