Import-export and sourcing Africa, China, South-East Asia, South America and Europe
Project finance
Project finance is the generic term used to describe a project where the debt finance for that project is provided in reliance upon an assessment of the viability of the project. The lender's recourse is usually solely to the cash flow and, if necessary, the assets of the project, including contracts for the supply of raw materials, the sale of the finished product and a host of other arrangements relating to the continuing operation of the project. In contrast to funding the general business activities of a borrower, project finance concentrates on the financial viability of the project and ensuring that it will continue to be robust in any reasonably foreseeable circumstance, rather than placing substantial reliance on the continued creditworthiness of the borrowing entity.
Project Phases
Successful businesses are well planned and well capitalized. Being well capitalized, is having the ability to access capital when you need it. Being well planned, will help you to be well capitalized.
Being an Entrepreneur is not an easy endeavor. Developing a business plan, requesting funding from strangers and facing the possibility of rejection makes it even harder.
Usually Corporations and Entrepreneurs benefit by having their business presented to a number of Lenders to which they normally wouldn’t have access.
When a facilitator take on the financing of your project, he will not offer you a standardised banking product but financial services tailor-made for your requirements.
Any Type of Security - Any Type of Government Issued Note or Bond - Any Bank Instrument - Any Currency Bills or Notes - Virtually Any Form of Paper that can be Bought, Sold, or Traded.
Some Examples Are:
US Currency (any denomination)
Foreign Currency (any denomination)
US T-Bills
US Zero Coupons
Government Medium Term Notes (MTNs)
Government Bonds, Coupons, or Certificates
German Bearer Bonds
Stocks or Stock Blocks
Government Promissory Notes
Bank Promissory Notes
Corporate Bonds, MTNs, and Promissory Notes
Certificate of Deposit (CD)
American Depository Receipts (ADRs)
Bank Guarantee (BG)
Letters of Credit (SBLC, ILC, LC, Pay Order)
Private Debt - Mortgages, Loans, Liens and Encumbrances
All instruments pledged must meet the following criteria to qualify as acceptable security.
a)must have been issued from a top 100 bank or institution,
b)must be transferable and negotiable,
c)must be bank-to-bank verifiable,
d)must be of non-criminal origin,
e)must be owned free and clear with no encumbrances,
f)must be fully legible with no alterations or editions,
g)actual instruments must be produced at closing and given to the escrow attorney effecting closing.
Lenders require that the collateral for the loan exists in the form of negotiable instruments that are rated and traded in the secondary markets and that can be easily liquidated in the United States or other major secondary markets in Europe and Asia.
Funding sources consist of Private lenders, trusts, banks, Private placements and Syndicated loans. We arrange all funds regardless of whether a project is involved. Funds borrowed must first be secured by acceptable collateral offered to the lender ( meaning principal amount and interest should be secured through the pledging of “A” rated Commercial Papers, Bonds, Notes, bank or Insurance guarantee, etc..
Submission Procedure
A Letter of Intent to Request Funding: this is a simple letter from the borrower, signed, dated, with borrower's corporate seal, and notarized, stating the amount of funds to be borrowed, the required interest rate and for the required period how many years.
Funding Procedure
Usually the instrument will be screened to determine acceptability. Your Guarantee will be checked by contacting the bank officers for full verification. Remember the necessity of bank-to-bank SWIFT/Key-Tested Telex secure verification.
Does your bank request a "proof of funds" from the Lender before they will issue the guarantee or any kind of letter of intent to guarantee? If so, the deal is over and you need to find a new bank. These institutions are attempting to use other peoples funds to create guarantees, placing all risk on our lenders. You should be careful of any and all "proof of funds" deals.
Usually after a copy of the instrument was obtained and verified with the bank's officials, a proof of funds will be done on a bank-to-bank basis. At the right time, the guarantor bank will be provided with the full swift and KTT coordinates and there will be a mutual secure confirmation of the funds and the guarantee. After the signing of the contract to fund by the borrower, this process will be repeated when the funds are transferred to the borrower's account, and the guarantee is transferred to the lending bank's account. The a contract Offer to Fund will be ussued if it's a legitimate instrument verifiable by Swift. If this is acceptable to the borrower, a bank-to-bank funding will take place, using the same secure method used to confirm the guarantee and the funds earlier.
Self-Liquidating Arbitrage Loans
(Source: A Scully)
You don't have to be rich to get an Arbitrage Loan. You just need to know what to do and where to go. Needless to say, you have probably seen hundreds of offers over the past ten to twenty years - but have you been able to get a Self-Liquidating Loan? Probably not. Because there's many con artists associated with this investment technique. If it was that easy everybody could arrange one!
An arbitrage loan is different. Its a loan where you profit from the spread between interest rates. You can get a loan and make money through some arbitrage and hedging. This is absolutely legal under international banking rules.
Some procedures must be respected and you have to know what to do and how. To give you an idea of how an arbitrage loan is made here is an example. Basically, an Arbitrage Loan, looks like this:
BORROW from $5.000.000 to $ 20.000.000 for a period from 5 to 10 years;
OBTAIN discounted collateral using some of the money you borrowed. This collateral is usually in the form of letters of credit or certificates of deposit; which is pledged as collateral to the lending bank and will repay the principal of the loan, in-full at maturity;
INVEST some of the money you borrowed in an income-producing investment that will pay the interest on your loan each year, in arrears. The income stream from this investment is assigned to the lending bank to pay your interest on the loan;
PAY all of the broker's commissions and finder's fees from the balance of your loan's proceeds;
THE DIFFERENCE BETWEEN THE INTEREST PAID AND THE INTEREST MADE IS YOUR PROFIT.
You have borrowed the MONEY; paid for COLLATERAL to re-pay the PRINCIPAL; paid for an income-producing instrument to pay the INTEREST for you; and paid all of the COMMISSIONS and FEES. The amount you have left is yours to keep and do with as you like (depending on the market, to the tune of $200,000 to $1,000,000.). This is called the "ARBITRAGE PROFIT."
All of the above actions take place SIMULTANEOUSLY at the closing of the loan, which is arranged by the " Escrow or law firm " for the Boutique Investment Banker who put the deal together. The boutique investment banker is the most important piece of the puzzle. It gives the bank what it need to feel comfortable with the transaction.
Since you will obtain the required collateral and income-producing instruments from the loan proceeds, your credit history does not matter. All you need, is a viable project for which the fall-out from the loan will be used.
You don't need to have a high net worth or be a millionaire to get an arbitrage loan. In fact you don't need to invest a dollar of your own money. Your current financial position is unimportant under this plan.
You may wonder if any bank will lend you 5 or 10 million based on a project without a substantial investment from you. Yes, it will since its fully secured by Certificate of deposit or acceptable Letter of Credit and by the assets in your project. But not all banks will accept this.
International banks seldom do any loans less than 5 million. You virtually kill your chances by trying to make an arbitrage loan for a smaller amount than 5 million. You also need a sound project with a business plan. This is of primary importance.
