No need to tie up a sizable amount in minimum AUM allowing Borrowers to reinvest in their businesses to generate higher returns
GREATER TRANSPARENCY WITH A COMPREHENSIVE TERM SHEET
Salient terms are negotiated upfront, minimizing misunderstandings and reducing lengthy negotiations resulting in lower legal fees
Cash Collateral Not Utilised By Lender/lessor
Cash collateral is held separately where interest earned is for Borrower. Cash collateral is not used by Lendicate or Funders for their own profit
No Libor, no swaps, no swap breakage costs and no hidden fees. Will be more apparent in a no-Libor market
BROADER RANGE OF FUNDERS
Matching Funders with corresponding risk appetites and/or understanding of the market where the Borrower is in
FINANCING COST DETERMINED BY MARKET FORCES
Determined by market driven Funders, based on transaction structure, credit and other risk considerations. Not affected by unique considerations affecting a financier
Lendicate is a neutral party. Transaction terms aim to be fair to all parties
On-Demand and Secured Access to Information
Secure online access to information. Access all legal documents, invoices, bank statements anytime anywhere
An asset secured loan provide to the borrower by the lender that is secured by collateral (in this case, an aircraft) via a mortgage.
Borrower bears the risks and rewards of ownership of the asset.
A financing structure where the financier (lessor) is the legal asset owner during the lease tenor and ownership of the aircraft is transferred to the Lessee at the end of the lease. As the lessor is the owner during the lease, no mortgage is required.
Lessee bears the risks and rewards of ownership of the asset.
A financing structure that must meet the following criteria:
- Lease cannot have a bargain purchase option at end of lease
- Lease tenor cannot exceed 75% of economic life of asset
- Present value of lease payments cannot exceed 90% of fair market value of asset
Asset is returned to the lessor at the end of the lease unless an option to purchase, if any, is exercised by the lessee. Lessee has the right-of-use of the asset during the lease period.
The financing of progress payments that a purchaser makes to a manufacturer while the new aircraft is being constructed.
Frequently asked questions
How are the lease or loan payments handled by Lendicate?
The lease/loan payments are made by the Borrower to a neutral third party payment agent jointly appointed by the Borrower and the Funder(s) to provide security and comfort to all contracting parties in the transaction, mitigating risks against the non-performance of fund flow obligations. The payment agent’s role and scope of responsibilities are set out in the lease/loan agreement.
Will going through Lendicate mean the approval process time will be longer than choosing a more traditional financier?
Timing for the approval process should be similar with traditional financiers as Lendicate will collate information from the Borrower, conduct KYC, due diligence and other analysis to prepare the information package (credit application) submitted to the Funder(s) for their approval. This process is no different from a traditional financier’s process of obtaining approval from their credit/investment committee.
What does on-demand and secured access to information mean?
Registered Borrower and Funder users can access their transaction information anytime via the link sent or through the Lendicate website to access all the transaction information (historical and updated) comprising transaction documents, invoices, bank or securities statements, Borrower annual reviews (for Funders), inspection reports etc. Registered users will be automatically sent notifications via email for any new information uploaded into the portal. To ensure confidentiality, there is a user email address and date watermark on documents printed or downloaded by the user.
What is a comprehensive term sheet and how does this term sheet provide greater transparency?
The term sheets are lengthy, which may seem daunting, as salient clauses including the full security package, covenants and undertakings, termination/default events, mandatory repurchase/repayments, representations and warranties, conditions precedent and subsequent are covered in the term sheet. We believe that since these clauses are in the transaction documentation, it is better to set these clauses out sooner rather than later to minimize any misunderstanding and lengthy negotiations.