FLOCK Funding is designed to provide flexible portfolio capital for clients who spend up to $50M annually.
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FLOCK Funding is:
More than a transaction
- Funding that allows our clients to capitalize on market opportunities and customized to our client’s capital needs
- Funding that provides clients with capital solutions to grow their business
- Funding is supported by a team of experienced industry professionals
Fair, fast and flexible funding
- A custom funding structure - advance rates, servicing fees and equity split
- Fair terms - parallel payback, term length, competitive rates
- Fast response - funding as needed, quick turnaround
Our solution is designed to:
Maximize cash flows for our partners
Provide the necessary leverage to optimize ROI and IRR on each investment
Our clients' capital requirements help determine the best solution for the growth and sustainability of their company.
Our FLOCK Funding structure provides portfolio capital for clients spending up to $50 million annually.
- High Advance Rate
- Provide Funding for Larger Deals
- Residual Profit Sharing
- Higher Up Front Fees
- Attractive Preferred Return
- Collection Based Repayment Structure
- Life of the Portfolio
- Reduced Advance Rate
- Provide Funding for Mid-Sized Deals
- Reduced Residual Profit Sharing
- Up Front Fees
- Low Preferred Return
- Collection Based Repayment Structure
- Standard Term
- Lower Advance Rates
- Provide Funding for Smaller Deals
- Limited Profit Sharing
- Higher Up Front Fees
- Higher Preferred Return
- Collection Based Repayment Structure
- Short Term
We develop terms to maximize investment return, cash flow or create a hybrid solution to provide balance.
A Joint Venture Funding Structure
FLOCK Specialty Finance uses an off-balance sheet structure for funding portfolios.
Portfolios that FLOCK funds are placed in a Special Purpose Vehicle (SPV) that is controlled by our clients. Our legal documents create a structured agreement between FLOCK and our partners that:
- Aligns our interests
- Creates an opportunity for favorable tax treatment
- Creates collateralization for future purchases
The Advantages of FLOCK Funding Versus Traditional Financing Structures
Example: Funding Options for a $1M Portfolio Purchase
Traditional Capital
- Corporate and personal guarantees typically required
- Low senior advance rates requiring larger equity investment
- Fixed amortization results in rigid repayment terms that may not be aligned with liquidation curve
- Blanket lien may be required that encumbers all corporate assets
- Funds may be controlled by lender
- Mezzanine layer of capital adds additional complexity to the transaction*
FLOCK Advantage
- No corporate or personal guarantees required
- Seasoned team of industry professionals with a proven track record of success
- Higher advance rate requiring smaller equity investment
- Simple structure (no mezzanine layer*)
- Flock joint venture terms are aligned with the purchased asset’s performance
- No fixed monthly payment
- Debt buyer receives servicing fees first
- Potential capital gains treatment
- A financing partner that does not take title
- SPV structure unencumbered by balance sheet and is bankruptcy remote
Maximizing Our Customers' Profits:
Capital
The Power of Leverage
Terms and investment expectations are collaboratively determined between FLOCK and our client.
The cash flow, net of servicing fees is returned pari-passu to FLOCK and our client until principal and preferred return are achieved – after which the payment priority switches to a profit share, greatly increasing our client’s ROI and IRR.
- Client Return % of Original Capital Contribution
- FLOCK Return % of Original Capital Contribution
Contact us to schedule a call today!