04/30/2014
Monetization Financing Program
There are three significant requirements needed for a client to utilize this monetization financing:
1) an assignment of/or an absolute and unconditional promise to pay from an investment grade obligor or an acceptable substitute financial instrument backing the transaction,
2) a predictable cash flow, and
3) a date certain payment. An investment grade obligor for this program is typically rated by S&P and Moody’s with an acceptable rating. However, there are exceptions and substitutes for these rating criteria. If a company is not rated there are alternate procedures to qualify said obligor. An obligor is typically a customer or other third party that has contractually agreed to make payments to the client within a term of 1-30 years. In one sense monetization financing can be viewed as a longer-term variation of factoring without the high cost and other major differences associated with factoring.
As discussed herein, this financing vehicle is differentiated from and more advantageous than traditional financing for unqualified borrowers in the following categories:
· Low competitive fixed bank interest rates rather than tied to prime interest rate
· Interest rates are determined by a combination of term of the loan, credit of the obligor, and treasuries at the time of the commitment
· Unique flexibility in payment terms allowing payor to customize repayment terms to suit their own specific corporate needs, including the option to defer payments for up to 5-7 years, and then periodic scheduled payments thereafter extending from 1 year to 30 years in amounts determined by the client.
· Transactions available at levels starting as low as $1 million with no upper limit, whereas large investment banks only undertake these private placements starting at much higher minimums per transaction of $75 million plus.
· Off balance sheet financing can be structured in many cases, allowing corporate assets to be still available for other financings
· Funding can be structured as a loan or as a contract buy-out in many cases, at the discretion of the client
· In many cases repayment can be structured as an operating expense versus repayment of debt, which is more beneficial for many budget restricted entities such as hospitals, schools, Governments, etc.
· Completely non-recourse to client seeking funding
· Private placement to one institutional investor rather than a syndicate; transaction is therefore confidential
· No closing fees or transaction fees from financing company
· Extremely diverse industries financed, no industry restrictions
· Lender does not rely on underlying transaction but solely unconditional promise to pay by investment grade obligor or equivalent substitute collateral
· Potential for corporate clients’ strategic partners/sponsors to assist synergistically in financing client by providing their investment grade muscle or other substitute collateral to facilitate transaction
· Generally 100% LTV of the present value of the payment stream can be funded versus lower LTV’s with traditional financing
· No geographical restrictions, transactions may be in the United States or foreign
· Detailed review of clients’ financials, projections, business plan, collateral and other documentation is not necessary, due to reliance on the promise to pay by a qualified third party.
· Quick approval and expedited closing facilitated by reduced due diligence and the monetization process.
We offer:
1.- Monetization of Pre-existing Future Payment Streams
2.- Monetization of New Transactions
Monetization Financing Program is a good way to infuse cash in your business! Call us for more information (727) 755-4482.
http://www.commercial-loans-florida.com/blog/monetization-financing-program
There are three significant requirements needed for a client to utilize this monetization financing: 1) an assignment of/or an absolute and unconditional promise to pay from an investment grade obligor or an acceptable substitute financial instrument backing the transaction, 2) a predictable...
