We have a program that enables someone with a small amount of money to lease a financial instrument to use as collateral in order to obtain a larger loan in order to obtain funding for their project. This is perfect for start-up projects. Minimum to get started in this program is USD $100,000. There are no maximums.

Here’s how it works:

Example: Someone has $100,000, but needs $7,400,000.

1. Client provides a client information sheet and proof of funds, license/passport. If client wishes to fund a project, we would need a summary of the project.
2. Client receives a contract from the investment company outlining the terms.
3. $100,000 is wired into the investment company’s account at Wells Fargo for the lease of a financial instrument. If for whatever reason the loan doesn’t go through, the $100,000 will be refunded.
4. Leased Instrument is used as collateral to obtain a credit line of $740,000.
5. From the $740,000, $100,000 is paid back, leaving $640,000 less fees.
Takes approximately 20 days to complete.
Client can go back in for another loan but not for 45-60 days due to banking regulations.
6. $500,000 is used to lease a new instrument. It is used to obtain a credit line of $1,850,000.
7.From the $1,850,000, the credit line of $740,000 is paid back, leaving $1,110,000.
Takes approximately 20 days to complete.
Client can go back in for another loan but not for 45-60 days due to banking regulations.
8. $1,000,000 is used to lease a new instrument. It is used as collateral in order to obtain a credit line of $7,400,000.
Takes Approximately 20 days to complete.

So a client can go from having $100,000 to having a loan of $7,400,000. Interest rate is Prime plus ¼%/year (currently 7.5%), Interest only payments, with a balloon at the end of the term. Term is 1 year, renewable up to 5 year (no cost to renew, but interest rate is adjusted to Prime Plus ¼%). The cost for the lease of the instrument is 0.05%/mth. There is no prepayment penalty. Client can pay off credit line and re-enter as many times as he wishes to obtain the desired funds.

Is this an instrument that is unque to the USA or could it also be used in South Africa?

Hi, I have looked at your interesting capital raising model. My question is whether it works in markets outside of the USA or is it restricted to that country only

Reverse mergers in the last couple of years have become a viable means to raise capital. Especially if you have a good IR firm that can get you volume. Once you have volume, you have access to the hedge fund money. Some people will disagree, but when it comes to PIPES the hedge funds really don’t care about fundamentals, just liquidity. Of course doing a PIPE isn’t without its downside either. I’ve had investors tell me that discounting the stock is telling them I don’t believe its worth what it’s trading for; I disagree. The tradeoff for the money up front and the investor taking the short term liquidity risk is a discount. Structured properly (i.e. fixed conversion price) you receive the money you need for product development, sales, etc. and still maintain control.