Single Transaction Participation Agreements
Lenders Funding prides itself on being able to structure a participation to fit the needs of every client. Here is a representative listing of the various types of participations.
Our services.
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Pari Passu
This is the most common form. We purchase a percentage interest in your transaction, which can be as low as you wish, and as high as 75% of your employed funds. The percent can be changed by you at any time, giving you great flexibility in managing risk and capital. We settle up weekly, bi-weekly or monthly, depending on the volatility of the transaction.
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Fixed Dollar Amount
Our percentage in the deal fluctuates, but our dollars remain constant. This obviates the need for periodic settlement between us, simplifying administration.
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Last-In-First Out
Assuming your deal with your debtor is capped at $4 million, but your concentration limitation is $3 million per debtor. We serve as the "shock absorber", participating in any amount by which the outstanding funds exceeds $3 million. In this way, you may accept larger deals than you concentration limits would allow, and you are always assured of maximum employed funds
Types of Single Transaction Participation Agreements
We offer a variety of loan types. All fully customizable to fit your business.
Compensation Alternatives
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Share in All Fees
Whatever you earn we earn, prorated for our share in the transaction.
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Over-Ride
You earn more than we do, since you are doing all the work. Typically, we would allow you a 10% override, meaning that if you earn 36%, we earn 90% of 36% or 32.4%.
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Fixed Compensation
We earn an agreed to percentage on our employed funds, irrespective of what you earn. This is easy to administer.
Compensation Alternatives
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Termination Rights
You can terminate on short notice, but we cannot. As you increase your own source of funds, you can retire our participation, maximizing your ability to earn.
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Standard of Care
This is negotiated. Usually, you will set forth the audit and verification steps you intend to take, and so long as you follow them, you will have met the standard of care. In addition, you will be held to the same standard of care as (i) you follow in other deals, or (ii) a reasonable and prudent client would follow.
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