Asset Based Lending
Traditionally, corporate credit underwriting is based upon a combination of profit and loss, sufficient cash flow to debt coverage ratio, credit ratings, etc. On occasions when the above mentioned factors are not sufficient, we are capable of arranging debt capital solely based upon the immediate value of an asset that can be pledged as collateral. In the event that the terms of the loan are not fulfilled, the collateral asset is sold as a means of loan repayment. The interest rate of these loans is typically higher than traditionally underwritten loans. The loan-to-value of this style of debt financing is commiserate with the available liquidity of the collateralized asset class should the loan not be repaid and the collateral is called upon to be sold to satisfy the debt. In these types of loans, we seek highly liquid assets such as precious metals, diamonds/gemstones, and real estate, . We also lend against financial instruments whose value can be immediately verified. We can also provide financial instruments when a trade finance situation arises. We can move and act quickly when required and are open to placing debt capital in a variety of ways as long as it makes logical sense from an underwriting standpoint.
Collateral Examples
- Refined Precious Metals: Gold, Silver Platinum, Palladium,
- Jewelry Grade Gemstones: Diamonds, some colored stones
- Real Estate: Must be located in major metro area within the United States.
- Financial Instruments: Investment Grade Bonds, Standby Letter of Credit, Bank Guarantees, Certificates of Deposit (must be a top rated bank)
- Energy products: Refined fuel products of all kind that are currently in a tank or ship.
Frequently Asked Questions
We typically make short term loans of 1-3 years at variable or fixed interest rates depending upon the collateral.
Collateral must be fairly liquid and either be housed with a top bank or stored in an acceptable safe-keeping warehouse vault or other acceptable facility where a lien can be placed and the collateral can easily be called upon in case of liquidation. Real Estate must have acceptable title where a lien can be recorded. Metals must be refined and registered. Gemstones must be cut and polished.
If the collateral value is acceptable at a loan-to-value that we feel comfortable with then re-issuing credit is possible.
Funds must be used for a stated business purpose with the full intent to repay the loan from the activities for which the capital is utilized for. Examples include business expansion, real estate investment, trade finance, mining, or other business opportunity. We do NOT place consumer loans.
Yes, we are capable of working internationally with top rated banks, insurance companies, and service providers with the exception of real estate where we only work in the lower 48 United States.