Principle of self liquidating debt
This is absolutely legal under international banking rules.Some procedures must be respected and you have to know what to do and how.The boutique investment banker is the most important piece of the puzzle.It gives the bank what it need to feel comfortable with the transaction.To give you an idea of how an arbitrage loan is made here is an example.Basically, an Arbitrage Loan, looks like this: All of the above actions take place SIMULTANEOUSLY at the closing of the loan, which is arranged by the " Escrow or law firm " for the Boutique Investment Banker who put the deal together.Borrower will e-mail their full business plan, executed Letter of Intent, (LOI - form available upon request) on borrower’s letterhead with signatures showing Proof of Funds to set up their escrow account for 2.2%, their lending bank’s LOC (Letter of Commitment) and a signed & notarized fee agreement for 1%.
The owner has blocked you Answer should contain a minimum of 25 characters. Unfortunately, the answer you are trying to submit has already been added.
Yes, it will since its fully secured by Certificate of deposit or acceptable Letter of Credit and by the assets in your project. According to Scully, international banks seldom do any loans less than 5 million.
You virtually kill your chances by trying to make an arbitrage loan for a smaller amount than 5 million.
Short term, self-liquidating loans do this since the borrowed funds are used to purchase assets that generate the needed funds.
Suppose From out of a Bank Loan for a period of5 years ==50 Taxi Cars are purchased and the borrower himself runs a Rent a car business.