Investor opportunities through FamilyLending.ca Capital Fund Ltd.
FamilyLending.ca Capital Fund is a niche lending business in Southwestern Ontario that caters specifically to the farming, residential and commercial communities. The business has flourished as an alternative lender to the traditional banks in the region and has been particularly successful lending short-term money to asset-rich clients who temporarily fall outside the traditional bank lending criteria.
The company’s conservative lending policy, together with its established team of underwriters, has led to very strong fundamentals as a private company without a single default to date.
Offer of memorandum coming January 2018.
Who is FamilyLending.ca Capital Fund?
- An alternative lender, located in Chatham-Kent, Ontario, that provides interim capital solutions to residential, agriculture, and commercial clients
- Seasoned and proven management team totalling 55 years of experience in mainstream and alternative lending
- Recognized as leaders in the industry by their peers
- Only lender on 2017 Royal Agricultural Fair panel discussing alternative lending
- Current model has successfully operated in the form of a lending syndicate for 10+ years
- Management leverages successful lending experience in a corporate structure with an efficient and attractive source of funding
Our Ideal Clients
- Residential Housing: Sub-division developers in mid-size urban markets; need for “project completion” funding, not land banking; Min 30% loan-to-end sale value equity
- Agricultural Market
- Small to Medium Commercial: Annual sales under $5MM, with fewer than 100 employees, lack credit history needed to secure traditional loan; majority of equity in land and buildings
- Successful operators with historically strong fundamentals, but due to circumstance are unable to currently access traditional bank financing
- Willing to pay 2-3% premium for more expedient and personalized service
- Hold demonstrable equity in land, buildings and equipment with a course of action that will return their debt servicing ability back to mainstream lender requirements
- Requested loan enables borrower to improve their operating metrics to mainstream bank financing standards
- Financings is term money, progress draws on construction projects and letters of credit. No margining accounts
- $100M in pre-funded &/or committed loans with a Jan. 1st drawdown on their books with an additional $100MM to $150MM in additional funding / M&A opportunities in Year 1
- Starting loan portfolio: gross income of approximately $8MM and net income of approximately $2MM
Lending Policy & Risk Exposure
- Main policy: protect the base lending capital
- Utilizes higher risk capital pools to act as buffer in event of default
- All opportunities are:
- Pool A Loans – comprised only of borrowers whose loans are 55% or less of collateral appraised value. Any losses would hit the base capital. No first loss capital
- Pool B Loans – comprised of loans with 56 – 80% LTV. Higher risk capital would fund all loan amounts from 56-80% and are covered by the first loss capital.
Loan Portfolio Breakdown
- Loans collateralized at 60-65% LTV
- 90% of loans have an LTV equal to or less than 67%
- 10% of loan portfolio has an LTV above 68%
Underwriting & Due Diligence
FamilyLending.ca Capital Fund is NOT a shortcut to easy credit!
- The due diligence process will be mirror image of that employed in mainstream banking
- Conducted by an expert team in underwriting and credit risk management with over 25 years direct credit experience
- Detailed lending policy has been developed and is available for due diligence review
Appraisals & Valuations – “Two ways out”
- Borrower recovers from temporary cash-flow challenges / returns to mainstream capital markets
- Borrower does not achieve financial recovery and to repay FamilyLending.ca Capital Fund must:
i) Secure financing from higher risk lenders
ii) Voluntarily liquidate collateral
iii) Involuntarily liquidate collateral
- Rigid collateral valuation requirements:
• Must be AACI designated and in good standing
• If new to FamilyLending.ca Capital Fund, must submit credentials for review
• Must have full narrative appraisal: no drive-by’s or Letters of Opinion
• Applications of $1M+ undergo site visit by FamilyLending.ca Capital Fund underwriter
Interest Rate – 7% – 14%
Upfront Fee – 2% of loan value minimum (one-time fee)
Loan Size – $0.25M – $20MM
Loan Segmentation – Agriculture: 50-75% (Niche Ag: 0-20%), Commercial: 15-30%, Consumer: 5-14%
Term – 1-2 Years
Repayment – Majority is interest only
Co-Founder of FamilyLending.ca and FamilyLending.ca Capital Fund, Robb has three decades of experience and understands agricultural, commercial and residential lending and specializes in providing bridge financing for borrowers until they return to the requirements of mainstream banks and credit unions.
Kim, Co-Founder of FamilyLending.ca, has over 20 years experience in compliance, policies and procedures. Kim is a member of the Canadian Association of Mortgage Professionals and has the Accredited Mortgage Professional designation.