Loans or debt, can be structured and procured in a multitude of ways, dependant
on requirements and circumstances.
Instrument based loans are secured by various irrevocable and unconditional
guarantees and processed and funded through prominent banks in Europe.
Rates on such loans can be extremely marginal over LIBOR. Loans are without
covenants or restrictions, can be at a fixed rate for uptil five years and closed in a
short duration.
Contract based financing is available for project developers and suppliers with an
offtake purchaser in place. Contracts can be monetized to provide 100% of the
project costs to the developer / supplier, with long moratorium periods.
The financing institution will normally finance all the requirements of the supplier
of the goods. The buyer would pay profits and principle to the financing institution
via a lockbox provision. On a few occasions the purchasers / buyer's obligations
may need to be guaranteed by a guarantor acceptable to the financing institution.
This facility is suitable for transactions of between one year and twenty five years;
and for real estate, commodities, and energy projects, amongst others.
For structuring this transaction from an Islamic Morabaha financing perspective,
please visit Islamic Financing.
Asset-Backed Financing (ABF) refers generically to all forms of financing where
a financier has a claim over specific assets being financed. ABF is unique in
that it typically involves fixed rate, long term loans without any financial covenants
attached. ABF structures are generally based on a percentage of the value of the
underlying assets which can be up to 100%.
Better for the Balance Sheet
ABF is an effective alternative to bank term loans typically secured on corporate
or personal guarantees or other company assets. Today's GAAP treatment of
demand term loans can mean all term debt is classified as a current liability. This
distorts financial ratios and results in increased borrowing costs.
Cash Flow loans refers to financing against projected or expected cash flows,
either of the existing company or target acquisition / new project. A variety of
parameters and analytics are used for cash flow loans.
Cash flow loans as subordinated debt are used for funding growth and financing
acquisition. They are an effective way for exponential leveraging of growth across
all industries and are available for uptil seven years.
For debt, notes and bond placements and issuances / offerings, please visit
Private Placements.
TM
G l o b a l C a p i t a l , B e s p o k e A p p l i c a t i o n s
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