Funds are secured by a variety of instruments such as leases, supply agreements, energy savings contracts, etc or corporate guarantee and, therefore, are not a lien on real estate nor appear on the corporate balance sheet. This means Lender can fund present dollars on the future guaranteed income such as business and asset sales, structured settlements, annuities, government contracts, entertainment industry contracts, charity and non-profit contributions, sports contracts, triple net leases, and more.
Underwriting guidelines dictate the following:
1. Investment grade rated Obligor (BB+)
2. Absolute and unconditional promise to pay
3. Date certain for payment
4. Sum certain payment obligation
5. Payment schedule 3-25 years
6. Interest rate from 7-10% fixed 7. No upfront fees, only small fee at closing
8. No requirement for use of funds
9. Non-recourse to borrower 10. No equity requirement
11. $5 mm to over $500mm loan size
How to benefit from this program?
Example 1 XYZ, LLC owns a shopping center anchored by a major retailer and has debt of $100mm. The note is currently due, but XYZ, LLC can only qualify for $65mm of new debt, and does not have the $35mm difference. Depending on the lease rate and the term, the major retailer's lease could be monetized to fund this difference.
Example 2 1) ABC Corporation needs to expand and move to a larger facility, but is short of cash. Lewis Financial arranges a loan secured by a corporate guarantee, thus providing the needed cash for the expansion. 2) Investor locates a building that suits ABC Corporation's needs (at a significant discount to its value due to current market conditions). 3) Investor leases building to ABC Corporation. Lewis Financial monetizes this lease for funds to purchase the building, then the building is resold after move-in for profit.
Example 3 Investment grade company borrows on corporate guarantee to construct new facility.
Example 4 Developer has multi-pad commercial development with major anchor tenant but can not find land improvement financing. Secured on the major anchor lease, funds are released to developer and improvements are completed
Example 5 Small Co., a company with few assets, develops a product which will be purchased by a major company for sales and distribution. Lewis Financial can secure funds on the contract to build a facility and/or purchase manufacturing equipment, interest accrues until product produced and sold as per original contract.
For more information regarding our Monetization program, please contact Bill Lewis at (831) 429-9200.
Commercial Real Estate and Financing Solutions Since 1969