Like our Funding Criteria, our Funding Process is clear and non-negotiable.
If you’d like to apply for funding, please click here.
It’s important for you, as the borrower, to fully understand the funding process before proceeding to the stage where you submit your full information package on the proposed business opportunity.
If all is in order then we would put forth an Offer to Fund, often within 1 business day. Then, if our Offer is accepted by the principal seeking capital, we would follow that with a complete Funding Agreement for review and signature.
There is a cost of entry by the Investment Bank(s) (not by us) and you, as the ultimate recipient of the capital, are responsible for paying it. Before we can proceed, you must have funding for the Bank Facility Fee in hand. The process goes as follows:
Understanding the Bank Facility Fee.
Our companies regularly make use of a bank facility that we created, where we pledge illiquid or long-term assets (capital) to obtain a one year secured line of credit, providing our group with fresh liquidity with which we provide corporate loans and investments. We make use of the services of more than one set of relationships to get the job done.
Bank Facility Fees.
The minimum Bank Facility fee (not our fee) to do one round of financing is $300,000 USD and increases as the size of the capital requirement increases. Please add $50,000 USD for legal and travel expenses, as a face-to-face is required of me with the investment bank(s) for each transaction.
When amounts being borrowed are not all required on day 1 of funding, and are spread out per a draw down schedule, the bank facility fee can often times be reduced somewhat, but not lower than the minimum as stated. We evaluate each opportunity on its own merits.
Fully Recourse Debt Financing Bank Facility Fee.
In this financing scenario, the bank facility fee is 2% of the capital requirement. For example, for a $15,000,000 debt transaction, the bank facility fee is 2% or $300,000 plus legal/travel, and so on. We are also happy to consider Cumulative Preferred Shares by way of a Special Purpose Vehicle for this alternative debt structure, should corporate earnings be delayed.
Private Equity Financing Bank Facility Fee.
This route subjects us to a higher risk exposure, so our hedging is relied upon more than straight debt. For PE transactions, the min. $300,000 bank facility fee plus legal/travel will create the liquidity and hedging for us to make a $10M investment, that is, 3% of the capital requirement. We are more selective with private equity transactions than we are with straight debt.
Non-Recourse Benefits Bank Facility Fee.
This arrangement requires our maximum hedging in order not to lose money, as a Non-Recourse Benefit does not involve repayment, interest payments or security. It is an outright payment to the one seeking capital. Please keep in mind – your bank facility fee generates a multiple of 10x in non-recourse funding. The minimum bank facility fee of $300,000 plus legal/travel generates a $3,000,000 Non-Recourse benefit.
Non-recourse transactions may attract tax consequences to the recipient, so we advise that you consult with your tax advisor.
Those seeking capital may consider taking advantage of the non-recourse option to create more capital to fund a large Fully Recourse of Private Equity bank facility fee. The option is there. Or, they may do multiple tranches (subject to the minimum transaction) as well.
Letter of Intent Service Fee.
Should you require seed capital and your prospective lender wants to make sure that you have a “round 2” in place, to assure they get repaid, we are happy to put forth a Letter of Intent, assuming you qualify for our funding, except for having the bank facility fee in hand. For this service, the charge is 0.1% of our agreed funding amount, and the letter will be released to you once your wire is received by us.
Transmission of the Bank Facility Fee
The Bank Facility fee is wired to our investment bank by way of the following steps:
- Borrower transmits by wire to one of our holding companies, typically our Canadian Holdco, including the $50,000 for legal costs and travel. We show that the funds are on account.
- We transmit the bank facility fee to our investment bank upon their “go”, and transmit a copy of that bank wire, unredacted, to the borrower, to show transparency.
Transmission of Funds.
Once the investment bank has received the Bank Facility Fee, the transmission of funds occurs as follows:
- Gross proceeds are transmitted from the investment bank to one of our HoldCos., where the hedging takes place.
- Once in place, the distribution is made to the borrower.
- From transmission to the investment bank to funding completion is typically 60 days.
This process is non-negotiable.
Our group is the direct client of the investment bank(s), and the credit issuing bank. Bank Facility Fees will not be deducted from loan proceeds, nor will they be paid by our group in advance. When we invest in our own projects, we pay the bank facility fee. When we fund someone else’s capital requirement, they pay the fee. Do keep in mind, we are tying up assets for your benefit and there are costs involved in doing so.
Bank Facility Fee Protection.
The Bank Facility Fee paid by you is protected by our relationship with the investment bank(s). However, for additional protection, we include a promissory note in the master Funding Agreement for the benefit of the borrower.
Anticipated Start-to-Finish Timeline.
Typically, the time it takes for the borrower to receive the loan proceeds is 60 days. If for some reason on our side of the equation, the transaction does not close, the borrower will be fully reimbursed at day 60 by our group. If the transaction fails to close due to issues on the side of the borrower by day 60, the transaction will be cancelled, and the bank fees forfeited.
- Entity that seeks capital pays brokerage and/or advisory commissions out of gross proceeds at closing, if applicable.
- Project owners, advisors, brokers, etc., may deal through one of our trusted and approved Business Advisors directly, who will prepare the project/opportunity for our review.
- Should a borrower wish to meet Wes Robinson face-to-face to obtain comfort in the process, Wes will advise as to where he will be on a given date or date range, and the borrower may fly in.
If you’d like to apply for funding, please click here.