Effective 2-20-2009:

CMI Capital Group announces our client’s access to the following loan types:

1 – Line of Credit – As you know, most banks have stopped issuing business lines of credit.  They perform like a home equity loan but they are not encumbered by property.  CMI has secured a couple of different options, however, NON COLLATERALIZED LOANS’ parameters change often so we do not publish details.  If you would like more information, please send an email.

-          Lines are normally based upon a 680+ credit score and client’s net worth.   

-          Lines can be procured while applying for other commercial loans.

-          Lines start at $50K

-          Approval and funding takes about 30 days.

-          Broker fees are paid at closing on the total Line amount. 3% or $3500, whichever is greater at closing on entire line approved.

2 – Asset Based Lending – This type of loan is secured by accounts receivables, equipment leases, contracts, artwork, stocks, stand-by letters of credit, bank guarantees…almost any tradable financial instrument or commercial real estate

-          These loans take 2-6 weeks to fund and are based upon the asset for terms to be determined.   

-          Upfront fees vary with type of asset used and loans are approved case by case.

-          Broker fees vary from 1-5% depending on the asset used.

-          Assets are used as collateral.

3 – CD Guaranteed Loan - It has been CMI’s mission from the beginning of the company to find new ways to service our clients and to provide them with quality loan products.  It is with great pleasure, and no little excitement, that CMI will now offer a rapid turnaround CD based loan.  The procedure is as follows:

·         Client places funds into our partner bank (bank is 130 years old and FDIC insured)

·         These funds are used to secure a CD, current rates are at 3.25% APY(this rate changes almost daily) on a 60 month CD

·         The client will then be offered a loan at 2% above the CD rate, for the same term as the CD; in the example above they would be given a 60 month loan at 5.25%.

·         This loan can fund in a week.

·         LTV can be 100%

·         No credit score requirement, though the credit report is used to show repayment ability

·         Loan amounts can be as large as several $100M, as long as the company can show that they can support the loan (combination of past income, pro-forma and business plan)

Many people have asked what good does this do…if I have the money, why would I need a loan for the same amount?  The answer is simple; many of our clients have personal wealth but do not want to use those funds to support their business.  With this model, the client can earn interest on his funds while the business pays back the loan.  In other words, the client will receive monthly earning off the CD while his business is responsible for paying off the loan.

Requirements for this loan

-          2 years tax returns, to support the repayment of the loan

-          2 forms of ID:  Driver’s license and Social Security card, for example

-          Application and Signed CMI Fee agreement

-          CMI charges $500 application fee and 3 points at close on these loans

4 – Private Investor/Lender – This is how most of our loans are funding right now through private investors and private funds.

-          Typical rates for loans are libor +3 or 4%

-          1-4 points to the lender plus broker points.

-          Upfront fees range from $0 – 1% of the project.

-          Most loans are taking 90-120 days to close and most fees are paid at closing including broker fees.

-          100% loans are no longer available through any funding other than the humanitarian funds below.

5 – Joint Venture Partner/Equity Partner – This is a continuation of #4 above but upfront fees are normally higher.  Most equity deals are taking 120+ days to close.   Most of the equity deals we’re seeing are structured like a typical loan with loan payments in exchange for ownership in your company.  Example:  they will lend you the total amount of your project less your “skin” and expect interest payments from you for the duration of the project. OR YOU CAN ‘BURN DOWN’ the equity during the duration of the loan.    ((Terms vary widely and are determined when the loan is negotiated.))

The important thing to remember for private lenders is that we are working with ‘their’ money and on ‘their’ time schedule.  We can anticipate 90-120 days closings but sometimes they happen in 30-60 days.   Also, most private investors want to see you put 5-10% of your own money into the project.  This isn’t always mandatory; we won’t know until “we throw it on the wall and see what sticks” with the investors.

6 – Capital Contribution Financing -  INSURES YOUR LOAN = Easiest of All Funding Program

The client must be willing to put at least 1% of the loan amount requested  into the investor’s licensed, bonded attorney escrow account, which is then used to purchase an asset bond instrument.  This process gives the investor an added assurance for the loan.

-          Full disclosure and transparency for clients

-          Can be debt – equity or combination

1.       Rates vary based on ratio but range from 6-9%

ETA:

1.       With application:  1% proof of funds required via Bank Capability letter  (i.e. $100m loan would require $1m)

2.       Approximately 4 weeks later Term Sheet issued and 1% is required at that time to purchase the insurance wrap.

-          Funding begins in approximately 90 banking days in equal tranches.

-          Loans from $50,000,000

-          The 1% funds must be deposited into the investor’s licensed bonded attorney’s escrow account after the receipt and acceptance of the Term/Funding Agreement .  The 1% is refundable if investor is unable to fund the loan.

-          Program can be Debt Financing/ Equity Financing/or combination

-           Loan Rates & Terms:  Estimated from 6.25%% -9.25% (combining Equity financing will reduce the rate).   Equity positions are 25% to 40%.

-          Investor may allow up to 24 months interest deferment.  Investor May allow Interest Only.  Terms TBD.    Normally 3,5,7 year projects.

-          NO prepayment penalty

-          1 point paid at closing to investor  and 3 points paid at closing to broker

-          Project Types:  Technology, Business Services, Telecom & Media/Entertainment, Automotive & Biotechnology/Pharmaceuticals, Industrial, Real Estate, Hotels, Resorts, Energy, and Power, Healthcare.

7 – Humanitarian Fund – These funds start at $100m and look for 4 LOAN TYPES:

PREFERRED LOAN TYPES:

1.       ENERGY,

2.       MANUFACTURING,

3.       TECHNOLOGY,

4.       “GREEN PROJECTS”

These loans should meet the following criteria:

·         Environmental technology during construction or refurb such as solar power/wind power/water recycling & treatment

·         Environmental enhancements such as green spaces/rooftop production of food and gardens/permeable streets for water collection

·         Economic focus such as adding new employees to a community

·         Socially positive focus such as low cost housing/staff child care/senior housing

EVERY FUND HAS ITS OWN FOCUS AND ITS OWN TERMS.  Points and interest rates are lower than normal and often paid outside of the closing table.  NORMALLY, there is no debt service during the length of the project allowing the client to build his business.  Each fund allows a predetermined number of projects and when that funding is filled they accept no additional projects.   There is SOMETIMES an upfront application fee to the underwriter and this varies.

8 - 15k EQUITY FUND funding now:

This is a Private Equity Group funding now.

PREFERRED LOAN TYPES:

1.       ENERGY,

2.       MANUFACTURING,

3.       TECHNOLOGY,

4.       “GREEN PROJECTS”

·         Will consider 100% funding.

·         Focus for funding at this time is technology, manufacturing and the environment.

·         30% equity required by Fund

·         Minimum of 5 years commitment

·         No debt service during life of partnership

·         1 point to the lender at closing plus broker points as separate line item

·         2 Fund representatives must sit on company board as full voting members.

Estimated Time Frame:

1.       3-4 weeks for pre-approval

2.       3-4 weeks for MOU offering.   Upfront underwriting fee of $15,000 due at this time.   This is a onetime fee with no other upfront fees charged other than site visit if client requests.  

3.       3-4 weeks for due diligence.

4.       JV Contracts signed and funding begins in 60 banking days.

This fund is PRIVATE.

-          If FUND is interested in your project, additional information is requested and submitted to FUND.  CMI collects a due diligence fee at this time for $3,500-5,000 depending upon loan amount.   (less than $99M = $3500; over $100M = $5000)

-          Exit Strategy for FUND – FUND takes ownership of 30% of the project.  FUND expects Client to stay with FUND for at least 5 years.  During that time, FUND will not command DEBT SERVICE.  At the end of the agreement, if Client does not want FUND to stay a partner, Client will have to pay FUND the loan balance and 30% of the project via refinance, stock option, sale of company, profit…  During the program, there will be no debt service from Client to FUND but there is profit contribution to FUND.

9 - 100K BOND PROGRAM funding now:

The Loan Amount must be for $50 Million Minimum.  The client is required to purchase bonds for $100k.  These bonds are registered and placed into syndication.  When the bond sells, it funds the client’s loan.  Bonds are wrapped with life insurance policies to guarantee the investor’s (the end buyer of the bonds) principle.

-          Will consider 100% funding.

-          Full disclosure and transparency for clients.

-          Lender requires client to fly to Chicago to meet him at client’s expense.

-          Loan is sold through SEC Licensed Broker under strict federal regulations and Homeland Security requirements.

-          Rates from 6-9%, Interest Only.

-          You pay interest only that starts in year 3 but includes interest from years 1 and 2.

-          Ten year bond.

ETA:

1.       Application submitted to investor.  YOU MUST SHOW PROOF OF $100K FUNDS AT THIS TIME.

2.       He is very selective in types of projects he takes.

3.       Initial conference call – client with investor

4.       Client flies to Chicago to meet investor.

5.       Term Sheet issued and $100k is required at that time to pay for the registration and binding of the bonds

6.       Bonds are issued and sold.  Can take days or months.

7.       Loan funds as the bonds sell.

10 – 250K BOND PROGRAM funding now:

Loan Amount must begin at $50 Million.  The client is required to purchase bonds for $250k.  These bonds are registered and sold to a waiting exit buyer. The only difference between the $100k and the $250k is that the bonds in the $250k are PRESOLD so there is no delay.  The greater cost is for a more full registration packet that the exit buyer requires.  An added benefit is that this registration level will allow the insurance to also cover the first 2 years of interest, so the client only pays years 3-10 as interest only payments.

Bonds are wrapped with life insurance to guarantee the investor’s principle and first two year’s interest.

-          Will consider 100% funding.

-          Full disclosure and transparency for clients

-          Lender requires client to fly to Chicago to meet him at client’s expense

-          Rates from 6-9%

-          Ten year bond.

-          Non-recourse

-          Interest only loan and payments start in year 3

ETA:

1.       Application submitted to investor.  YOU MUST SHOW PROOF OF $250K FUNDS AT THIS TIME.

2.       He is very selective in types of projects he takes

3.       Initial conference call

4.       Client flies to Chicago to meet investor

5.       Term Sheet issued and $250k is required at that time to purchase the insurance wrap.

6.       Bonds are issued and sold immediately.

7.       Loan funds in one tranche at the end of the bond issuance process.  (exception – larger loans may fund in multiple tranches)

Note for all programs:

Financing is not guaranteed.  The Borrower understands and agrees that this information is not a guarantee for funding and that the terms of all loans will be negotiated with lender.  CMI is a financial conduit between lenders and borrowers and it is our job to introduce lending sources to clients.  Full representation of  terms is between lender and borrower but this representation is done to the best of our knowledge.