Monetization can be a great way to get a project in funds and there are clients served who are successful this way. But monetizing can work for any genuine and well established company with significant revenues now seeking additional funds. Financial substance of the beneficiary client is essential if an instrument is to be obtained in one way or the other from a third party, and if it should be monetized through another party or a funder.
A client will have to be of substance, have an established business and prove past years’ revenues to succeed and to gain access to a valid bank guarantee instrument in the first place. An entrepreneur without substantial financial background will not be able to lease or buy an instrument from one party on the basis that a second party will come up with all the fees and costs involved and provide a relevant LTV to the client. If a funder or monetizer should directly receive the Prime Bank collateral instrument he will have to be contractual partner of the borrowing and lending transaction. So he would become the actual borrower.
Here is how we certainly can help a client of financial substance.
We can help leverage a client’s financial possibilities. If there is already a monetizer or funder in place, we can issue a Prime Bank default guarantee payment instrument which can be used for an agreed upon period of time to serve as valid collateral.
There are two ways the transaction can be materialized.
• We can SWIFT MT760 the guarantee directly to the funder or monetizer
• or we can send the instrument to the client’s own bank, which will then, on the back of our instrument issue an own (back-to-back) instrument to the funder or monetizer.
In both instances there has to be a bank confirmation or endorsement for the payment of the borrowing and lending fees. A client can choose from 4 different payment methods. An additional essential requirement for a third party to provide a valid, fully verifiable cash backed, divisible and assignable Prime Bank Instrument on loan, is the receiving bank’s confirmation to return the instrument 15 days prior maturity.
You can borrow and we can lend you the unrestricted collateral use of the fully cash backed, divisible and assignable instrument, but this instrument, even though without any controlling features is not meant to pay for your (eventual) debts. Obviously you could never expect this if you only pay a small lending fee. A SWIFT MT760 -issued instrument represents cash- and securities backed collateral, available for an agreed upon period of time and you can benefit from its collateral value during that time.
As there are rules, there can also be exceptions and alternative solutions.
The instrument will only be issued if the receiving bank agrees to this and if it confirms that they will return the instrument unencumbered and without any claims 15 days prior maturity if the service is not renewed. In case it is too difficult or time consuming due to the one or the other reason to get this “return of the instrument confirmation” from the receiving bank, this can be compensated and replaced by an Insurance Bond in absence of a receiving bank confirmation. You can buy such a bond at 2,5% of face value of the instrument that you seek and you will have to pay for it directly to the facilitator or securities dealer before the bank guarantee instrument can be issued and is sent to the receiving bank, funder or monetizer before the Prime Bank collateral instrument will be issued. In that case the receiving bank of the funder or monetzier will not be requested to provide such a confirmation. This however does not release a client from the liability to pay for any debts you may create or leave unpaid.
To sum up:
1. An applicant client (borrower) wishing to engage a monetizer or a funder will have to be of financial substance himself.
2. The receiving bank of the instrument will have to be prepared to issue or endorse a payment instrument for the borrowing and lending fees.
3. The receiving bank will have to confirm that it will return the financial instrument 15 days prior maturity, in case the service is not renewed on time.
4. If such confirmation is not available, the client can purchase a bond to compensate the potential risk of lending valid collateral.
5. If the receiving bank is not the client’s own bank, the funder, or monetizer will have to become contractual partner of the borrowing and lending transaction.
We prefer to work with qualified clients. Chances to materialize a transaction can be very high. If a client is not of substance, chances are high that there is a lot of work for all parties involved and in the end, no result. If you would like to discuss options and possibilities you could be qualified for and an immediate transaction, please use the reply form, or call 00353 86 03 25 153. This number also works on Whatsapp, Signal, Telegram and WeChat.
Funding African Trading Transactions
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A helpful Strategy to attract Investors
How a Loan Agreement can attract investors.
Proof to be eligible to borrow funds
How to benefit from a Loan Agreement if you don’t have collateral.
How to benefit from a Loan Agreement asking for collateral.
How a Loan Agreement can get you in funds.
Why should a client provide a Mandate and place a retainer to get a bank instrument and credit enhancement service?
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