[Mynameisbob]

I recently have been getting these 18-24 month debenture facility approvals with a fund called Capnow. Its interest only payments for the first 3 months and then principal and interest after. They are giving me approvals for merchants that are over-leverage in MCA's but are showing a profit on there balance sheet, and as long as the company grosses over 1m annually. I haven't closed any deals with them yet, because the stips are a mile long. Anyone else familiar with this type of product or knows any other funds that offer this product with less stips?

[DiamondBL]

I am assuming that they consolidate the outstanding debt?

[Mynameisbob]

Yes, They pay off the debt and also place equity restrictions and serious monthly reporting. If the company even thinks about seeking any financing without permission the fund will file a default

[WestCoastFunding]

Got a link to their site?

[WestCoastFunding]

Reminds me of Dan Page’s old program. I loved it.

[Mynameisbob]

Oh no, the financials covenants that this fund places on these businesses are way more intense than Dan Page's program. I remember that program. Still have have UW criteria. They have advisory fees, Facility fees, commitment fees, legal fees,closing fees,DD fees,Field audit fees, lots of post closing requirements ect. The list goes on and on.

[mcaguru]

were is dan page ?

[Christian]

were is dan page ?

He only does RE backed loans now.

[RichardGerard]

There are a few Hedge Funds that act like investment banks that we work with. They circumvent usury by charging investment advisory fees, with ongoing monthly reporting, and by being domiciled in the Caymans etc.

In my experience these funds should only be considered as last chance funds. They always need to be fully collateralized and the cost of capital looks like a large advance-which makes sense only in limited situations.

There are times when a client cannot qualify for anything else and if they use this Capital transitionally it can extend terms to give the client the opportunity to cash flow- instead of suffocate.

The group Dan Page previously referred business to had an optimistic model-but was flawed. They were often subordinating debt with no real way to perfect a lien in the event of a default. These Hedge Funds make sure clients can't go sideways without attaching to something they can liquidate.

The stips they require are necessary to write up a credit/investment memo