Is Collateral Transfer right for your business?
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Raise capital and utilise Stagnant assets to create cash generation.
Many businesses and corporations regardless of size or stature will acquire and hold assets of some nature. As the business grows, so does its assets. Often through the growth process, the older assets or under-used assets may begin to take a lower priority over newer and larger assets used by the business. It may also be the case that assets may be acquired and used to secure loans, debts and other repayment obligations. Some assets are more liquid and used to create investment returns. Cash may be invested into bonds and other bankable securities and the business may utilise the returns and retain the capital on its accounts.
There are many types of assets, those that are liquid (Cash/Bonds), those leaning toward liquid (Short Term/Property), those that are less liquid (Long Term/Static) and those that are very illiquid that we would term ‘Exotic’ (Rights, Sub-terrain assets, etc). These assets can be depicted in an ‘Asset Spectrum’.
When it comes to raising capital against assets, conventional banking facilities offered from high street and mainstream banks can often utilise the more liquid assets and a greater Loan to Value ratio can be achieved.
However, when it comes to the longer-term, less liquid assets and of course the exotic assets, many businesses would struggle convincing a conventional bank to grant credit facilities over these.
That does not mean that they cannot be utilised. Assets falling into these categories can be used through the creation of bespoke financial structures to create cash flow, raise capital and enhance balance sheets.
More liquid assets such as bonds and property can also be used to maximise returns where they are not already encumbered. Whilst these assets may already produce monthly or annual returns, the capital held within these assets may still be regarded as ‘stagnant’ as the capital is simply sitting there. It is possible to tap this equity (without risk) to produce enhanced returns up to 12% gross per annum* in addition to (and unaffecting) existing returns.
By using these stagnant assets (often difficult to identify from the company accounts), our Clients can;
To find out how your business can use its stagnant assets more efficiently or to make an application for raise capital, please contact our expert team who will be able to offer you guidance and advice and establish the necessary no-obligation consultations.
* Subject to 12 month commitment. Returns may vary. This does not constitute an offer of investment.