| The
term “angel investor” refers to a wealthy Corporate investor
who provides capital for a privately held company/project, who as
a general rule, prefers to remain anonymous. The Grant Funding Program,
which began in Sept’05, is an angel funding alternative to both
conventional lending and venture capital financing. The purpose of
the Grant Funding Program is to enhance the community and its economy
by providing an innovative financing alternative to help local businesses
expand their market share and thereby produce new jobs. However, unlike
venture capital or conventional lending, the Grant Program is a non-repayable
funding alternative.
Advantages of
using the angel grant program over conventional funding.
• No upfront
fees
• Non-recourse
• Non-qualifying (Subject only to pre-approval of your project)
• No debt service
• No mortgage or liens
• No financial statements required
• No tax records required
• No interest charges
• Non-repayable
These are just
some of the projects we are interested in funding.
• Business
acquisition’s
• Apartment complexes
• Subdivisions
• Condominiums
• Office buildings
• Casinos
• Resorts
• Strip centers
• Shopping malls
• Hotels/motels
• Hospitals & medical facilities
• Energy projects
• Mining operations
• Manufacturing plants
• Distribution centers
• Telecommunications industry
• Transportation industry
• Maritime industry
• Restaurant chains
• Amusement / theme parks
• Sports arenas
• Entertainment venues
And many more!!!!!!!!!!
(Basically any type of project that will create jobs)
GRANT FUNDING
GUIDELINES
To begin the
Grant funding process, submit a preliminary Executive Summary to
Grant Administrator, presenting an overview of your business plan.
Please follow the attached Executive Summary guidelines.
• After
an initial underwriting review of the above you will be notified
in writing if your company and/or project qualifies and is approved
for the Grant.
• Following
acceptance into the Grant Program, you must secure collateral acceptable
to the Grant Administer to establish your creditworthiness. The
minimum acceptable securitized collateral (SC) is $5 Million USD.
The amount of the collateral required is determined on a case by
case basis dependant on the project and the amount of Grant funding
requested.
The purpose
of the securitized collateral is to protect the Grant Providers
interest in the project, set the amount of the initial payment of
the Grant Funding disbursements, and allow the Grant Administrator
an opportunity to monitor the initial progress of the project as
outlined in the Grant documents.
The SC cannot
be otherwise assigned, forfeited/factored, pledged or in any other
manner encumbered in any way except to escrow it for thirteen (13)
consecutive months with the Grantees bank in case of default by
the Grantee of the specific performance as mutually agreed in the
Grant contract documents. If the Grant is not funded in full for
any reason the SC immediately becomes null and void.
• The Grant
Funding payments will normally be made through a series of tranches
as mutually agreed in the Grant contract documents.
• At the
end of the original Grant Funding, should additional funding be
required, your company/project shall have the option to continue
funding on the same terms as the original Grant Funding, subject
to Grant Program/funding availability.
• This
is a non-repayable “angel grant” and not a loan or a mortgage.
Neither you nor your company will sign any type of Mortgage or Promissory
Note. No Liens will be placed on any corporate or personal assets.
• An Administrative
Fee of 5% will be paid to the Grant Administrator. This fee is due
and payable no later than two (2) days after the Grantee receives
each Grant Fund disbursement. Grantee pays no other fees, commissions,
or closing costs related to funding.
• Upon
receipt of the Grant Funds in full, the Grant Provider is entitled
to 20% ownership and proceeds participation in the project in consideration
for same.
• If the
Grant is not fully funded by the Grant Provider the 20% stock ownership/proceeds
participation are null and void and any further administrative fees
due the Grant Administrator will terminate.
• Grant Administrator, states they are only an agent for the
Grant Provider and are not the source of the Grant funding, and
as such are held harmless by all parties.
EXECUTIVE SUMMARY
GUIDELINE
The underwriting
process for non-repayable “angel” grant funding is very
similar to conventional banking and venture capital financing alternatives.
As each project considered is unique from the next, a simple ten-point
common sense approach to initially evaluate a project to determine
its viability for funding is used.
Please submit
a preliminary (3-4 pages) narrative Executive Summary of the project.
This preliminary Executive Summary will set the stage for the terms/conditions
that are used to determine compliance of specific performance with
the Grant funding agreement. As our goal is to assist you in acquiring
and completing a successful project, should conditions require,
your Executive Summary may be amended at a later time to meet any
reasonable changing conditions thereof.
Specifically
include and submit the following (preferably via e-mail in an electronic
file format):
1. PROJECT NAME
Provide the
project and/or title of the project and the company name the project
will be held in.
2. GENERAL INTRODUCTION
Provide a general
introduction/vita of the principal(s), their pertinent/applicable
business, educational, and personal history, and specific contact
information for due diligence.
3. FUNDING REQUEST
Briefly submit
the (total) funding request for the project.
4 TERM
Chronologically
provide a tentative term/timeline of the project and/or its phase
dates.
5. COMMUNITY
IMPACT
How the project
will positively impact and/or enhance the community (e.g. additional
jobs, local revenue, community property value improvement, etc.).
6. ENVIRONMENTAL
Clearly define
and explain any environmental issues/reports and remedies thereof.
7. SPECIFIC
PERFORMANCE
Chronologically
describe the specific performance objectives as they pertain to
the development of the project and/or the capital funding structure/needs
of same.
8. EXIT STRATEGY
Describe the
anticipated specific performance of the project as it pertains to
the proposed exit strategy & profit structure for the project
term.
9. SUPPORTING
DOCUMENTS
Include any
relevant supporting documents (purchase contracts, warranty deeds,
surveys, appraisals, property tax statements, leases, rent rolls,
photos, etc.) that may be applicable.
10. LETTER OF
INTRODUCTION
A letter of
introduction from an acceptable Bank attesting the principle(s)
and entity are of good character. Subsequent documentation attesting
the Grantee qualifies for securitized collateral acceptable to the
Grant Administrator will be requested upon approval into the Grant
Program.
After an initial
due diligence review of the above, we will contact you to further
proceed with the Grant funding process as applicable.
FREQUENTLY ASKED QUESTIONS ABOUT GRANT FUNDING
Who is the Grant Provider (GP) and where do these funds come from?
The Grant Provider
is an accredited investor as defined by Federal Securities Law Rule
501 of Regulation D and registered as a US Corporation. The funds
are of a clean and non-criminal source as defined by the Patriot
Act. The funds will be disbursed directly to you and/or your company
from a major US Correspondent Bank with full disclosure on a bank-to-bank
basis.
Can I talk directly
to the Grant Provider to do my due diligence?
Yes. You will
be in direct communication with full disclosure once you have been
approved and invited into the program. Follow the procedures as
they are written herein to open the door to communication. There
will be full disclosure to all qualified applicants.
Will I be tied
to the Grant Provider program forever?
That will depend
on you and your project/business. If your project has a specific
beginning and end (e.g. purchase of a commercial real estate project
for re-sale), you will terminate the Grant Providers interest when
you sell/liquidate the project.
Why do I apply
to the Grant Administrator and not the Grant Provider directly?
The Grant Provider
will only deal with a qualified applicant/project after it has been
approved or in some cases conditionally approved by the Grant Administrator.
Approvals are usually determined within 72 hours of submission of
the Executive Summary. If approved, the grant Administrator will
then introduce you to the Grant Provider. Your bank and/or attorneys
will then deal directly with the Grant Provider from that point
forward with full disclosure.
What is the
purpose of the securitized collateral?
Similar to conventional
financing the securitized collateral (SC) is the means by which
the Grant Provider “qualifies” you monetarily as a Grant
recipient. For your protection and comfort the (SC) may be administered
by your bank throughout the entire transaction.
Can I use the
Grant Funds to initially collateralize the security?
No. You must
be able to qualify for the initial collateral on your own merit.
Once you receive Grant funds you can then use them as collateral
or leverage for additional funding in the future, but not before.
Why is the securitized
collateral escrowed with the Grantor’s bank for 13 consecutive
months on behalf of the Grant Provider?
Escrowing the
SC with the Grantor’s bank assures that it won’t be accessed
by anyone else, thereby protecting the Grant Providers interest
in the project. The thirteen (13) consecutive month period allows
the Grant Administrator the opportunity to monitor the progress
of the project as per the Grant documents. If for any reason the
Grant funding does not begin and continue according to the terms
of the contract, the securitized collateral (and any other interest
the Grant Provider may have in the project) becomes null and void.
If I name the
Grant Provider as beneficiary on a LC or CD can’t the Grant
Provider use it for his own interest?
No, because
the LC/CD is administered by your bank not the Grant Providers bank.
The language in the LC/CD clearly states that it cannot be assigned,
forfeited/factored, pledged or in any other manner encumbered in
any way except to escrow it with the Grant Provider's bank for thirteen
(13) consecutive months on behalf of the Grant Provider to protect
his interest in the project.
How will the
Grant Provider monitor the progress of the project to determine
compliance during the initial 13 months?
The 20% ownership/participation
entitles the Grant Provider to receive periodic accountings to monitor
the progress of the Grantee’s project. The Grant Provider becomes
a 20% investor only after you receive 100% of the Grant funds.
My banker is
not familiar with securitizing Letters of Credit, and CD’s.
How do I proceed?
That is not
unusual; most “local” US banks are not. However, your
local bank out-sources many of its day-to-day banking functions
to its major Correspondent Banking counterpart for many of its banking
services. Your local bank can contact their Correspondent Bank for
guidance on how to proceed.
This sounds
too good to be true. Do legitimate private investors really provide
such funds?
Wealthy private
concerns have been funding similar projects for decades. Such well
known non-profit organizations as the Red Cross, Ronald MacDonald
House, homeless and abuse shelters, etc., as well as for-profit
university scientific and medical research programs have all benefited
from angel investors during the last century. This particular Grant
Funding Program has a broader mission in that it benefits the local
community and its economy in general by providing a non-repayable
financial alternative to local business concerns. They in turn continue
to grow and further reinvest in their respective communities. As
with any of the projects mentioned above, this continued business
prosperity is therefore a benefit to the entire community.
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