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Introducing The Global 4X Loan Program |
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This wholesale lending program has privately funded billions of dollars over the past 15 years across a variety of industries including Commercial Real Estate, Technology, Cannabis, Infrastructure, Hotel and Resort Development with a wide array of business initiatives. It can be used for new construction, refinancing and working capital.
As long as you have a viable project, with at least 20% of the budget raised for your project you can qualify for a credit facility that is four times your deposit amount at the wholesale rate of LIBOR + 2, or 3.5%, whichever is higher at closing. |
4X Loan Highlights |
Interested? Read on.
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Wholesale Debt Financing
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This wholesale lending program has been operating since 2005 and is now available to direct borrowers. Unlike traditional banks, conventional lenders or venture capitalists, this is a privately owned and operated wealth lending program. Forget what you know about typical banking or conventional loans, this is definitely not that.
This unconventional approach delivers the security and the comfort required by borrowers and investors alike by offering borrowers with $10M USD deposits to keep their deposits in their own bank account. It is required that the initial deposit funds remain un-depleted and unencumbered while the loan is being funded and it is necessary to check the account regularly to ensure this. As a result, the lender's compliance officer must be added to the account with view only access for the term of the deposit. If the funds were to be depleted or encumbered during this time, it would result in a default and the loan would be called. For smaller loans where the deposit is under $10M, the borrower will be required to escrow their funds with HSBC London. US borrowers have the choice to deposit with a domestic Commercial Bank/Escrow Company who will take in the funds, park them in their holding account in their bank, where it can ONLY be moved when it is returned to the client's account from where it originated. Providing the borrower the opportunity to keep their capital in their own bank account gives both the borrower and their investors the confidence necessary to enter this wholesale lending program. It is important to note that this is NOT a retail lending experience and we rely on the security built into the structure of the transaction to provide our borrower's the confidence they need to proceed as they KNOW their capital is 100% secure, either in their own bank account or with a fully licensed and insured commercial escrow company. As a result we do not waste costly and endless hours supporting typical retail lending due diligence practices. As the justification for this due diligence approach is risk mitigation and with your funds in your account, their simply is NO RISK. As you can see, this loan makes it possible for companies around the world to achieve the right mix of equity and affordable debt. In today's climate there is truly no better way to capitalize a company.
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Summary of the 4X Loan
Unique StructureThe 4X program's ability to fund $5M to $5B with its wholesale 3.5% interest rate; its flexible repayment options; its interest only structure; coupled with the fact that it is non-recourse AND the borrower's may be able to keep their capital (serving as their initial funds deposit) in their own bank account, puts this in a league all its own.
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Incredible Terms
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Here's how it works: |
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The borrower needs a deposit of at least 20% of the project budget in cash to trigger the loan. Minimum deposit is $1M USD. The lender provides the other 80% required to complete the project. In other words, the credit facility is four times the deposit amount. In the case where the borrower is using a third party to position their initial deposit funds, it makes sense to deposit 25% rather than the typical 20% This allows the borrower to pay the carrying costs for the deposit out of the loan proceeds and repay the deposit amount in full at the end of the deposit term of a year and a day.
For projects with deposits of $10M USD or more the borrower may be able to keep their capital serving as their initial funds deposit in their own bank account. For smaller loans where the deposit is less than $10M USD, the borrower is required to escrow their funds with HSBC London or a commercial Escrow Company in the US. All deposits are governed by a Deposit Agreement separate from the loan contract. The deposit is returned to the account of origin, having never left escrow, after the term of the Depsoit Agreement which is a year and a day. This is a non-recourse loan with no personal or corporate guarantees. The loan is secured by the project the funds are being spent into. This is an interest only structure with a 48 month term standard at the wholesale interest rate of Libor+2 or 3.5% (whichever is higher at close). The interest is paid quarterly and must be kept up to date and an interest reserve can be built into the loan. The lender offers flexible repayment terms including the option to convert to permanent financing with them at the end of the term. The loan must remain open for a minimum of 12 months and there are no prepayment penalties. The lender takes a general security agreement (GSA) against the project being developed, whether that is a physical asset or Intellectual Property and the GSA is typically done on the LLC or SPV applying for the loan. If there was a default on the loan the lender would foreclose on the project. |
4X FUNDINGS
See why we say the 4X Loan can fund loans that just wouldn't even be considered anywhere else
Business Expansion 4X Funding Story
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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Luxury Development 4X Funding Story
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... |
NEXT STEP
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If you can confirm you have access to a 20% or 25% deposit (which must be a minimum of $1,000,000 USD), then you are welcome to download the Loan Summary Request forms and MNDA provided here and send us your Loan Request Summary package for review.
We will be back in touch to discuss and upon full review of your materials, if the lender likes the project, we will provide you with a Letter of Intent (LOI) expressing the lender's interest in funding your loan and will work with you from there to complete the lender's formal intake package. |
Download Forms:
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Make Contact. Learn More. Get Funded.