The Asset Backed Bank Credit Line Funding Program is a Systematized Process designed to bring a Project Owner and Our Lender together to realize the completion of a project. Some clients find our lender’s regular program problematic, in that it takes some time to set up the loan, the drawdown schedule can sometimes cause timing challenges, and they have trouble raising the required 20% in initial funds. This program has been rolled out to offer an alternative that eliminates those potential roadblocks and was introduced in May 2020 and designed to allow clients easy access to funding with fewer initial requirements and less restrictive timelines than our lender’s usual lending programs. In addition, it allows you to borrow from and work directly with your own bank. Our Lender simply facilitates the transaction and fully underwrites the project with the bank. Too often project owners are faced with the old situation of “Which Comes First, The Chicken or The Egg”. Our Lender is looking for projects that are profitable and at low risk. They are looking to facilitate a Project owner’s ability to receive a Credit Line from their Bank, for projects that are well thought out and can make their payment. The Asset Backed Bank Credit Line Funding Program allows all participating parties to develop that working relationship.
To participate in this program, unlike our lender’s standard programs, the client/borrower is not required to have already raised any “initial funds” at all. To participate in this program, the client will instead need to have:
- a project ready to execute that requires a minimum of $5M in funding, and
- a banking relationship with a lender that can execute a credit line backed by assets.
With such a relationship in place, our Investor will work with the client and their bank to set up a dedicated credit line/loan that will be underwritten IN FULL by our Lender’s assets. This credit line would be set up in an amount greater than that required to fund the client project, to ensure enough funds will always be available, and to afford funds to our Lender to put to work in other programs to fully mitigate their risk in the venture. The amount of pledged assets they require to set up the credit line will be provided to the Client’s lender by our lender, either through a bank instrument to be issued from the lending group’s own corresponding bank in the banking jurisdiction where our Lender’s gold is vaulted; an asset pledge of gold bullion from our Lender’s gold holdings; or an SKR (safe keeping receipt) issued by Brinks, that is fully backed by our Lender’s gold holdings with them. Our Lender can pledge the assets to them in whichever of these three methods the bank prefers.
When our lender and your bank come to an agreement to move forward, their banking team works with your bank to set up the credit line. They will paper the deal so that it is clear that your project is responsible for servicing only the portion of the credit line the project has used, and our lender is responsible for servicing any remaining balance. But it is always our Lender’s assets that entirely back the credit line principal 100%. Our Lender will consider all projects that are ready to execute and have a solid business plan backing them. All that you (the client) needs, is to be able to bring a banking relationship to the table, that is Ready, Willing, and Able to set up the credit line, backed by the asset of their choice, to have your project considered for full funding/underwriting.
Once the bank has issued a “soft” confirmation that they can provide the credit line (assuming of course that the asset meets their requirements and all of their Due Diligence requirements), our Lender will require that the client goes through their standard application and risk assessment protocols. This is to (a) confirm that they find the project an acceptable risk for them to fully back, and (b) in case of any eventuality where Our Lender may end up holding the note for the loan. As our Lender’s banking teams work with your bank to set up the Line of Credit, their team will be working with you to process your application and set up all loan agreements.
The most unique element of this program for participating clients is that they have a zero-risk position – they are not required to have any initial funds, they never have to escrow any money….. nothing. They simply facilitate putting our lender’s bankers in touch with their banker that has expressed interest in participating.
The bank will require a great deal of due diligence confirmations, both about Our Lender and their asset backing the credit line, but they will perform this diligence themselves. When our lender’s bankers are in contact with your bankers, they will have to provide them complete CIS information, and allow them to confirm the asset (whether pledged gold, Letter of Credit, or SKR) with the issuing bank/entity via SWIFT banking communication. The bank performs all required due diligence confirmations to ensure that everything is appropriately secured.
OUR LENDER ONLY engages with your lender once they have confirmed that they understand the offering, are content with the setup of the process and are able to proceed using our lender’s processes.
Our Lender will perform its own diligence/risk assessment on your project to ensure they are comfortable backing it. In addition, since our lender is assuming full liability for underwriting your project, they will be taking an equity position in the project for doing so. The level of their equity position will be determined on a case-by-case basis, usually based on expected EBITDA, and will be part of the contract set up between the client and our lender.
Here are the following Initial Requirements:
- Applicant must have a written verifiable relationship with their Bank
- Applicant must have an attorney and submit a letter stating so.
- Project Outline
- Budget Top Sheet
- Project/Production Schedule
- Funds Draw-down Schedule