Lewis Financial and Real Estate Services works closely with Lender who is part of a senior secured funding group that has been a leading corporate financer in a specialty area of structured finance. Lender has financed in excess of $3 billion of transactions in a broad array of industries and continues to actively finance transactions through executed agreements with Fortune 500 corporations and federal government agencies (“investment grade entities”) to small and mid-size companies. Each of the investment grade entities entered into an agreement requiring minimum required payments over the term of the loan. All transactions are private placements and offer many significant structural advantages over traditional financing. Transactions are completed through an efficient streamlined private placement converting current and future payment obligations from investment grade entities into capital that can be used for any business purpose.
Funding Information
Type of Financing: Lender offer a financing vehicle for institutional size transactions where there is an absolute and unconditional obligation from an investment grade rated entity (Corporate or Government). This can be in the form of a contractual obligation (Maintenance Agreement, Supply Agreement, License Agreement, etc.) or a financial instrument such as Irrevocable Letter of Credit, Guaranteed Investment Certificate, Treasuries, etc. Any recipient of such an obligation has the ability to monetize these future payment streams at institutional rates.
Recourse/Non-Recourse: Transactions are non-recourse to our clients. 100% of the recourse is to the Obligor making the payments.
Fixed Interest Rate: The interest rate is determined by a combination of the credit worthiness of the Obligor, industry type (sector) and length of repayment term. These are institutional rates, which guarantee an extremely competitive rate. The rate is fixed for the entire repayment term and Lender has the ability to lock in an interest rate up to 3 months prior to settlement.
Fees: Lender does not charge any origination fees. Further, there is no requirement to grant equity (stock, options, warrants, etc). Only origination fees are ones that have been agreed on between the broker of record and Borrower.
Application: There is no application.
Investor(s): Lender works with a number of institutional investors (major insurance companies and pensions). Lender has been able to develop excellent relationships over the past 15+ years which allows this excellent program to be offered. Depending on the investment grade rated entity, industry type and other deal variables will determine which institutional investor is used for a particular transaction.
Repayment Installments: Repayments are made in monthly, quarterly, semi-annual or annual installments.
Flexibility: Financing structure is completely flexible in the areas of structure, term, scheduled repayment amounts and deferred repayment periods.
Funding Period: Funding is typically within 5 business days of receipt of completed final documentation.
Documentation: Contracts/Agreements you have with your customer may have to be modified to meet our requirements. Lenders Attorney will work with you to ensure the proper language is in the Contract/Agreement or provide an Amendment to the documents. Below is an example of the type of language that would need to be incorporated into the documentation. There would also need to be some standard assignment language as well as other non-material documents.
“Notwithstanding anything to the contrary contained herein, and irrespective of the amounts of services actually provided to the Customer by Contractor, Customer hereby promises to pay to Contractor a minimum of $___________ on the two year anniversary of the contract (the “Required Minimum Payments”). Customer’s payment of the Required Minimum Payments is absolute and unconditional and the rights of Contractor to receive an amount from Customer of no less than the Required Minimum Payments shall not be subject to any defense, including but not limited to the bankruptcy or insolvency of Contractor, set-off, counter claim or recoupment which Customer may have against Contractor for any reason whatsoever.”
Transaction Process Flow
The following flow represents the typical steps in Lenders transaction. The time frames are based on each party to the transaction responding expeditiously to their respective tasks.
1. Submission of Project Overview, Executive Summary, and Identification of Obligor for Lenders review.
2. We will arrange a conference call/meeting between Lender and Borrower to discuss project and parties involved.
3. If the Obligor’s credit rating/finances is acceptable to Lender, the following information must be provided to Lender:
a. Detailed contact information on all parties (including Obligor) involved in the transaction.
b. Detailed write up/description of the transaction and financing request.
4. After the Lender has completed review of information provided from 3 above, we would arrange a meeting between representatives of the Lender, Borrower and Obligor to review the financing program and confirm all parties’ willingness to proceed.
5. Lenders attorney will work with the Obligors and Borrowers attorney to verify the wording in the agreements for unconditionally agreement to pay by the Obligor for the financing provided by Lender in case of non-payment by the Borrower.
6. Lender Formal transaction details (conditional term sheet) will be presented to Borrower with conditional approval.
a. Any required document/agreement changes will be detailed.
b. List of all closing document drafts and legal opinions will be detailed.
7. Obligor and Borrower will provide Lender:
a. All required documents/agreements with required changes
b. Legal opinions will be presented for review
8. When all closing document drafts and legal opinions are received and accepted by Lenders counsel, transaction closing will be scheduled.
9. Money will be wired 48 hours after execution of documents, in satisfactory form, when received by Lender.
All transactions are considered unique and will have their own requirements for a successful close.
For more information, please contact Bill Lewis at (831) 429-9200.
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