Alternative Financing Options For Business
What is alternative financing?
Alternative financing is an interest only loan with a principal balloon payment at the term of the proposed loan. Loan security are the class "A" preferred share certificates of a company.
Process For Pre-Qualification & Underwriting For Alternative Financing
Preliminary review & analysis for prequalification (PRA)
Formal prequalification transmittal (PQT)
Formal Debenture Underwriting Service Agreement (DUSA)
Alternative financing is underwritten for a start-up business or a company seeking to advance company growth without going to the public market(s).
It may also be suited for businesses that do not qualify for conventional asset or UCC based debt financing.
International Clients will be required to form a US based company that own 100% of the Foreign National company.
Funds will be disbursed to the accounts of the US based company.
This is a UCC requirement with no additional cost to the client charged to establish the US based company if needed.
The cost to do so is included in the underwriting commitment cost.
Requirements For Alternative Financing
A complete executive summary
A detailed use of funds summary in USD
Ramp up schedule time table needed to reach 1 year and positive cash flow of the pro-forma P&L
10 year proforma P&L in USD (Gross income over total operating expense = NOI pre-tax.
A summary statement specifying the proposed loan amount in USD
Alternative Financing Benefits & Terms Of Approval
Countries of Interest: USA and International (USA-friendly countries as qualified)
Funding amount: from $5M (USD) or more based on a qualified basis.
LTC & LTV: 100% as qualified Simple Interest: 8% to 11% (as qualified and subject to market adjustments)
Loan Term: 3 to 10 years
Loan Principal payment: Balloon, at term
Ownership Interest: None Interest Payment
Deferment Period: qualified to each project based on pro forma cash flow but NOT greater than THREE (3) years
Recourse and Personal Guarantees: None
Management oversight: None
Voting rights: None
Security: The CLASS "A" preferred certificate shares (to be issued) of a company; which function as a preferred lien interest until the loan is paid back.
Sale of Preferred Shares: NO sale of stock shares takes place under this program.
The funding portfolio is to finance companies or business concerns where an acceptable risk return is balanced by a governing market or business model of expanding opportunity.
Underwriting completion time to release for loan close: 30-60 days (estimated).
Closing and the disbursement of funds from underwriting completion: 30-45 days and/or until PAR (all loan funds) is completed.
Customary Underwriting Service fees apply.
These are due and payable at underwriting engagement*: Costs calculated on a sliding scale basis (qualified) beginning at 60% of capital finance requested.
All funds immediately released to client as the proposed loan closes, less customary closing costs (i.e. 3rd party & Fiduciary costs).
No hold backs, reserves, or PAR value(s) required for close of NET finance capital to the client.