About Our Multiples Based Loan ProgramsThis private wealth 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.
Our multiples based loan program is based on "multiples" of the borrower's "Initial Funds Deposit". The project owner is required to bring a minimum of $10M USD to the loan, whether it's their own capital or raised using an investor or lender. We refer to this as the "initial funds deposit" or "deposit". The loan is always a multiple of that initial amount, anywhere from 1X to 4X.
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The 4X Loan Redefined
JULY 2023 UPDATE
With the elimination of LIBOR effective July 1st 2023 our loans will now be using SOFR as the benchmark for interest rates. "SOFR" is the "Secured Overnight Financing Rate" and is currently at 5.06%. Rather than LIBOR+2, our loans are now SOFR+2.5%. Incidentally, this is about half a percent lower than what it would have been using LIBOR+2. The minimum amount of funds required for an Initial Funds Deposit to qualify for this program is $10M USD/EUR. Initial Funds Deposits are bonded with a registered and regulated security where both your capital and your interest are fully insured. Interest is US 12 Month LIBOR plus 200 basis points The Bond coupon pays 5% per annum (paid monthly) on all loan deposit funds (down from 7% in 2022). Deposits can be pledged to the bond via US Treasuries, CDs (Certificate of Deposit), Cash, SBLC/BG or Gold SKR. See Financial Safekeeping for details New Intake Process focuses on the Depositor's comfort with the safekeeping options in advance of the project's loan application. |
HIGHLIGHTS
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How it works:
The basic methodology behind this program is the role the initial funds Deposit plays. The Deposit is set aside and bonded, and its this that allows the wealth lending platform to generate the multiples (of the deposit amount) to furnish the loan. When the funds are bonded they are pledged to a fully licensed, registered and regulated bond (though they never need leave the Depositor's bank account), this shows the regulators that the appropriate amount of funds have been "set aside" by the project owner/depositor. When the initial funds are positioned in this way, the lending group's bank expands them multiples on their existing credit lines and they use this additional credit to fund the loan. There are no direct ties between the borrower/the depositor and the lender's credit lines. They simply access their own credit lines to fund a private loan between two private entities.
If your initial funds have been provided by a 3rd party investor or lender who wants those funds returned to them prior to the repayment of your loan, then you should structure your project and application package in such a manner that you can repay the investor from your loan disbursements. Note that the multiple that you will be approved for may not necessarily be the same as the multiple that you've requested, so this will be a dynamic exercise.
There are several methods available to borrowers (or their investors) that ensure the initial funds are positioned appropriately throughout the loan term. All deposit options fully guarantee the safety of the Depositor's capital. To see how these funds are safely protected against all perils, please see the "Financial Safekeeping" below.
If your initial funds have been provided by a 3rd party investor or lender who wants those funds returned to them prior to the repayment of your loan, then you should structure your project and application package in such a manner that you can repay the investor from your loan disbursements. Note that the multiple that you will be approved for may not necessarily be the same as the multiple that you've requested, so this will be a dynamic exercise.
There are several methods available to borrowers (or their investors) that ensure the initial funds are positioned appropriately throughout the loan term. All deposit options fully guarantee the safety of the Depositor's capital. To see how these funds are safely protected against all perils, please see the "Financial Safekeeping" below.
Program Recap
- The Deposit is never at risk and is not collateral for the loan
- This is a non-recourse loan with no personal or corporate guarantees
- Standard loan term is 48 months (extensions are possible, minimum term 12 months)
- This is an Interest Only loan at SOFR+2.5% that allows you to capitalize interest and fees, if required
- Borrowers must have a minimum of $10M already raised (cash or crypto) to serve as their "Initial Funds Deposit"
- The loan is typically funded across 8 to 10 monthly draws
- Any business, at any stage, in any industry, can qualify
- Credit scores are not relevant
- Strong business plan is required
Make Contact. Learn More. Get Funded.
As mentioned the key element of our lending programs is the requirement for an Initial Funds Deposit. It is the existence of the borrower's project, coupled with those initial funds already being set aside in a regulated environment, that makes the multiples based lending program possible.
The only requirement of those initial funds is that they remain in safekeeping throughout the loan term. If those 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 similar requirements from the lending group's insurance partners, there are specific methods and oversight required to guarantee that the deposits funds will remain positioned appropriately throughout the loan. NOTE ** The bond for lending programs has a coupon rate of 5% per annum (This is not the same bond coupon used in our Project Sponsorship program). That means that during the time the deposit funds are in safekeeping they will continue to earn a well-above-average guaranteed return of 5% per year. Proceeds are paid monthly by the Bond Group directly to the bondholder, so in most cases the bond is paying out proceeds before the loan has even completed its 60 day compliance process. The full disclosure package about the bond must come from the Bond Group, as they are fully regulated and licensed in the sale of securities. At all times, in everything having to do with your Initial Funds Deposit the Depositor will be dealing ONLY with licensed and regulated securities and banking entities, so they can have full confidence in the security of the process.
Once the Depositor is directly in touch with the Bond Group, they receive full information from them about the bond, the guarantees behind it, and a full description of the security of their funds. The Depositor can take this information to their bankers and securities lawyers to examine - as it will stand up to any level of due diligence. With those initial deposit funds secured in the Depositor's own account and pledged to the bond, it will generate the appropriate multiples for the loan, and begin paying out the monthly proceeds on the 5% coupon rate. Any Depositors following this process (on behalf of the borrower or project owner) will again only work with licensed and regulated securities and banking entities, so they again have full assurance of the security of their initial funds at all times. There are four approved methods (listed below) for this assurance currently available. All four of these methods have been designed to specifically ensure Depositors that their funds are fully guaranteed and secure at all times.
METHOD 1.
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New Intake Model |
As you can see as outlined in the Financial Safekeeping section above, the success of this program weighs heavily on the Initial Funds Deposit. We have encountered many project owners attempts to leverage an investor's capital to position their Initial Funds Deposit and it has become clear that the FIRST STEP in our process needs to focus on the education and comfort of the person making the deposit on behalf of the project seeking funding.
It is only when that person fully understands the safekeeping options available to them that we can proceed. To accomplish this our INTAKE PROCESS has changed for 2023. Now to engage with our lending platform the Bond Group will need direct contact with the Depositor - the person whose capital will be pledged to the bond for safekeeping. In order for the Bond Group to engage the Depositor directly, they need to be presented as a Sophisticated (Accredited) Investor, a regulatory requirement with an investment of this nature. As a result we require the Depositor's CIS (Client Information Sheet), a valid and current POF, a scanned copy of their passport, along with a 2 page project summary and a signed NDA. With that Intake Package we will present the Depositor to the Bond Group and they will contact the Depositor directly to review the bonding process, showing them how their funds are secure and fully guaranteed, and tp also review the best loan option for the project. Only once the Depositor has confirmed their comfort and willingness to move forward will the lending group agree to accept a formal loan application for the project. At that point, we will provide you with our Finder’s and Financial Agreement for signature and with the agreement executed, work with you to complete and submit your full application package. If you have any questions about our Financial Safekeeping
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