We have a unique opportunity for businesses to raise funding through our lenders as long as they have the backing of their local bank. This works best with clients that have a long-term established relationship with their local bank. In essence, our lenders will lend the client money based on their local bank guaranteeing the loan. The local bank is required to endorse the lender’s Bills Of Exchange through their corresponding foreign bank, which can be the local banks’ branch in the UK/Europe.
The business must be established and profitable with a strong balance sheet.
The business must have a strong transactional relationship with a local bank.
The business must own an asset, e.g. land, real estate, mines, licenses, governments agreements, etc.
The business must be able to borrow the money through a Bill of Exchange to be in the position to move the business to the next level; hence be in a position to pay the loan back.
Below indicate the costs involved for the Bill Of Exchange funding process. Please note the pricing is based on project and geographic risks so prices may be adjusted to reflect this:
Loan amount $5 – $50 million – Larger amounts can be considered on a case-to-case basis.
Term: 12, 24, 36, 48 months [interest paid annually]
Interest Rate [estimate]: 5% – 6% dependent on risk & prevailing bank rates
Lender’ commitment fee $35,000
Lender Arrangement Fee of 3%. Lender deducts this from the loan amount before disbursement.
Loan Broker Success fee of 5%
The only fee that is paid in advance of funding is half of the commitment fee [$17,500], and it is only requested on receipt and acceptance of the Initial Offer Letter from the lenders. It is imperative that the project can show that it can pay the loan back within the requested term of the loan. The use of a local bank assures the lenders that they would have carried out their checks before endorsing the project.
The Borrower must provide the following:
Executive Summary of the project for which funding is required
A comprehensive Business Plan
Total Cost of the project
Loan amount requested
Repayment period required by the Borrower
Full Corporate Name & Address of the Borrower
Full Name & Address of Borrower’s Bank [the bank that will endorse the Bills of Exchange].
Full Name & Address of the Bank’s corresponding Bank in Europe.
Before engaging with our lenders, we initially request the name of borrowers’ local bank and their corresponding foreign bank that will endorse the Bill Of Exchange. This allows us to confirm that the bank is acceptable.
Once we confirm that the bank is acceptable, we request that the borrower confirms with their bank that they are in a position to endorse Bills of Exchange in their favour.
This will be in the form of a letter from the bank addressed to their client confirming that the bank will back the Bill of Exchange funding for the required loan amount.
On receipt of the bank letter, the borrowing company signs an Engagement letter with the loan broker.
Based on the documentation provided above, the lender issues an Initial Offer Letter
Borrower to review and accept the Initial Offer Letter
A part-payment of the lender’s commitment fee is required
Upon acceptance of the above Initial Offer Letter by the borrower, the lender shall issue a Terms Sheet for funding against a Bill of Exchange.
The Terms Sheet will include:
Upon acceptance of the Term Sheet by the Borrower, the lender shall issue the requisite Loan Agreement to the Borrower for review and execution.
After both parties execute the Loan Agreement, the lender will issue the Bill[s] of Exchange in the aggregated amount of the loan required plus interest; for formal acceptance by the Borrower and to be endorsed by the Borrower’s local Bank [the “Guarantor”].
Upon receipt of the duly accepted Bills of Exchange, the lender shall remit the required loan amount to the Borrower through the corresponding foreign bank, then to the local bank before disbursement to the borrower.
The Borrower shall then utilise the funds to implement into the project.
The borrower shall pay annual interest to the lender
On maturity of the Bill of Exchange as per the agreed tenor, the lender will submit the Bill of Exchange for payment by the Borrower’s bank [the “Guarantor”].
The Borrower shall pay the lender, the full face value of the Bill[s] of Exchange being the loan principal.
Payment of loan will be the same currency as the original loan
Subject to the agreed terms of funding, the Borrower can exercise the option to roll over the loan by making the agreed interest payment to the lender.
Depending on the cooperation and execution of all parties involved, a Bill Of Exchange funding and therefore drawdown of the funds can be accomplished within 4 to 8 weeks.
However, this can only be an indication and does not reflect the time required for specific projects.