Using CAP Equity Investments for Senior Loans

CAP funding can be used to arrange 100%, full leverage, financing, with no additional “skin in the game” — just the Family Office funding in the capital stack — with sufficient completion assurance Security.

As a minority equity investor, we can help lower the hurdle of adequate Security for the target funding (see chart showing minimums here or below), once arranged, to then leverage some Senior Debt.

This does not decrease the amount of equity carried interest to be sold, but does enable full funding with smaller amounts of security, as the equity investment qualifies clients for arranging one or more senior loans as part of the total. The sequence of steps for this option boil down to

1) Evidence of Security for CAP equity (smaller cash deposit or SbLC for part of the total funding)

2) Contract for and Close on Equity Investment of ~10% up to 90% depending on total deal size

3) Then we help arrange a Senior Loan for the rest.

For example, if you seek $100 million in total funding, but have only $10m cash deposit, the optimal cash deposit for the full funding would be 33-35%, or ~3x (for better terms), so to make that $10m work for you, consider $30m in CAP equity funding, then we can help you secure a Senior Loan for the remaining $70m for a total of $100m in funding.

How much is enough Security? See minimums below. More than the minimum gets you better terms along with faster draws of the invested funds.

Please contact In3 or your Registered Affiliate any questions.