grade entities into cash that can be used for any business purpose.
Frequently Asked Questions
- An absolute and unconditional promise to pay from an investment-grade rated Obligor;
- Date-certain and sum-certain payment obligations.
An investment-grade Obligor is typically rated by S&P and/or Moodys with an acceptable rating. If a company is not rated, there are alternate procedures to qualify the Obligor. An Obligor is an entity which has contractually agreed to make absolute and unconditional payments to the client for a term of between 1 – 20 years.
- Who are we?
We are a leading financier in a highly specialized area of corporate finance known as Monetization Financing. Our unmatched ability to tap deep reservoirs of institutional capital enables us to monetize transactions for our clients efficiently, effectively and inexpensively. We uniquely facilitate transactions in a broad array of industries and offer many significant structural advantages over traditional financing. Completed through an efficient streamlined private placement, Monetization Financing can provide funding of $5MM or more within 30 days.
Simply stated we offer the best financing package available to small and medium sized companies – low interest rates, require no equity, board seats, covenants, or oversight and done in a quick and efficient manner. What is needed is for the Borrower to have an excellent relationship and/or offer a much desired solution to an investment-grade rated entity, such as a large corporation, school district, college/university, and local/state/federal government. We are able to fund those entities in need of capital today by taking assignment of long-term unconditional future payment obligations which these entities have or could obtain from an investment-grade rated entity.
- What sectors or industries are eligible to be included in this program?
There are virtually no industry limitations where a transaction may come from or for what products or services are financed.
- Do you have examples of the types of transactions that can be financed?
Examples include transactions in the following segments: service and supply agreements, license agreements, energy savings contracts, structured settlements, company or businesses unit acquisitions, deferred compensation for professional athletes and creative professionals and waste to energy and other “green initiatives”. There is truly a fit for any type of business where there is an investment-grade-rated entity securing the payment obligations.
- What is the financed product your Program offers?
The product is a unique financing vehicle of institutional size transactions where there is an absolute and unconditional obligation from an investment-grade rated entity. Any recipient of such an obligation has the ability to monetize these future payment streams at institutional rates. Some samples of these obligations are listed in the previous answer above. Samples of repayment structures include maintenance contracts, operating agreements, leases and many other forms of promises to pay.
- What is the interest rate?
Interest rate is determined by a combination of the credit worthiness of the Obligor, where treasuries are trading at the time we circle (lock) a rate and the length of repayment term. These are institutional rates, which guarantees an extremely competitive rate; based over treasury and fixed for the entire repayment term.
- What are the minimum and maximum repayment terms?
Three to twenty years.
- What is the time frame from initial application to settlement?
If all the stars are aligned we can close within two weeks however, typical turn around is four weeks. Our in-house counsel reviews the documents provided to determine if the obligation is absolute and unconditional. Any needed modifications to those documents are provided by us in writing. Depending on how quickly the respective legal counsel can turn the documents around will ultimately determine the time frame to settlement.
- When does the entity receiving proceeds in the transaction get their funds?
All proceeds are paid in entirety at time of settlement in the form of a wire transfer.
- What transaction sizes are eligible for this program?
Transactions can range from $5 million and up.
- Who are your finance sources?
We have a number of institutional investors (major insurance companies and pensions) acting as our finance sources. We have been able to develop excellent relationships over the past 25 years which allows this excellent program to be offered. Depending on who the rated entity is, industry type and other deal variables will determine which finance source is used for a particular transaction. All parties involved will know who the source is prior to settlement at the time we have a loan commitment and a non-circumvention agreement in place.
- How are these obligations secured?
The payments are secured by the absolute and unconditional obligations of an investment-grade rated entity and we file UCC’s against the repayment obligations
- Does a third party seller of equipment have any contingent liabilities in the future for any circumstance of non-repayment by the Obligor (Purchaser of equipment)?
Transactions are non-recourse to our clients. 100% of the recourse is to the Obligor making the payments
- Are board resolutions and corporate certificates required of the Obligor to settle these transactions?
- What benefits do you have over other financing programs?
We offer a great number of benefits as we are more flexible than any other traditional or non-traditional lending source. The simplest way to view this program is to know that the financing structure is completely flexible in the areas of structure, term, scheduled repayment amounts and deferred repayment periods. This is on top of the fact that we are easy to work with and provide unparalleled service.
Where Monetization Financing Works Best:
- Service and Supply Agreements
- License Agreements
- Energy Savings Contracts
- Waste-to-Energy Facilities
- Renewable Energy and other Green Initiatives
- Real Estate and Project Funding for Cities and Counties
- Deferred Compensation
- Real Estate and Infrastructure
- Funding for Government Programs and Projects
- Monetization Financing vs Traditional Funding
- Monetization Financing Benefits
- Monetization Financing FAQ’s
Simply stated we offer the best financing package available to investment grade entities – low interest rates, no equity or board seats, no covenants, no oversight and done in a quick and efficient manner.
Industries Where Monetization Financing is Working:
- Waste Management
- Water Purification
- Green Energy (Power Purchase Agreements)
- Waste-to-Energy Facilities
- Wind Turbines and Solar
- Oil and Gas
- Wastewater Treatment Plants
- Food Processing
- Nearly all industries can be approved!