Bank Instrument Program (BI) Clients Require $1,650,000 USD

The fund issues a Term Sheet to the borrower, guaranteeing that the fund will fund their project through the BI program.

A $100M leased BI will provide about $80M in financing from our proprietary investor group. The fund will syndicate the investor group under The fund’s name. This loan will be a combination debt/equity.

The interest rate is 1.5% to 2.5% over one year LIBOR, up to 60 months and up to six points for the lender and broker. Interest reserve and fees are added to the loan amount.

To qualify for this BI program, the borrower must prove to the fund that the loan can be paid back or the debt be serviced by the projects income.

Once the Term Sheet is signed and the money is wired to The fund’s escrow account we will proceed to complete the processing in about 5 bank days.

After processing is completed, The fund will then wire the money to a USA bonded escrow company for the purchase of a bank BI.

Once the BI is purchased, the BI will be posted on DTC for viewing. The fund is now the title holder of the BI.

This BI is lienable and callable, which means when assigned to the investor as beneficiary, the investor now has a $100M leased instrument which the investor can cash in should something happen to the project or the loan.

The fund is responsible to the bank should the investor claim on the BI. The investor now has first lien position in the project along with additional collateral being the BI.

The fund will return the $1,650,000 back to the borrower within 7 banking days after the BI closes escrow.

The fund shall pay all additional costs and expenses incurred in connection with a Commitment and the preparation for and the closing of the Loan.

The fund will be responsible for the following expected costs: site visits, travel, lodging, car rental, internal underwriting and processing charges, including overnight mail services, underwriting resources and personnel, legal expenses, and for third party report engagements—and any contingency or collateral commitment expenses that may ensue.

The fund will be reimbursed for these costs at loan closing. The fund will then complete any due diligence left on the file and issue loan documents within 90-120 days after the signed term sheet is returned back to the fund.

After the loan documents are signed and returned back to The fund we will then close escrow and disburse funds in accordance with the detailed use of funds schedule.

If the loan does not close for some reason The fund will reimburse all fees and issue a denial letter explaining why the project was not funded.

 

Escrow of Deposit Procedure

Borrower and Lender shall open a joint escrow via a law firm as follows:

1) both parties will sign approved escrow instructions

2) Parties to deposit a copy of this Agreement into escrow with originals sent to both Parties

3) Borrower to deposit the approx amount of $1,850,000 Collateral Deposit into escrow

4) Upon deposit of required documents and collateral fee, both parties must sign authorization for escrow agent to release and wire of approx $1,850,000 to Lender.

Escrow to remain open until return of $1,850,000 pursuant to time frame outlined in this Agreement. Upon return of the $1,850,000, the escrow is closed and SBLC is returned to bank.

Note: If the borrower or investor wants protection on the fees given to The fund then they can purchase a $2,000,000 Stand By Letter Of Credit (SBLC) for an additional $350,000.
This fee will be reimbursed at the close of the joint escrow.

PLEASE REMEMBER ALFA FINANCIAL HAS ACCESS TO MANY MORE FUNDING PROGRAMS NOT LISTED ON ITS WEBSITE.

( Please note all Funding Terms quoted are subject to change and are at the discretion of the funding source and Alfa Financial will accept no liability in this respect. )