OFFSHORE FINANCING: HOW TO SECURE FUNDING FOR YOUR BUSINESS PROJECTS

Senior Project Manager

FinancialBridge provides various offshore financing options for business projects, it determines, after proposal review, the appropriate funding body that is best suited for the proposed project.

With the USA Ex-Im Bank Programme, Financialbridge will package and procure 85% of the U.S. cost content of the Project as Loan from one of its associated U.S. Lenders that will utilize the Credit Guarantee Programme of U.S. Ex-Im Bank and the Promoter’ s Corporate Guarantee to provide related U.S. Loan.

The promoter of the project will also be required to provide the remaining 15% of the U.S. cost content as Equity Contribution as well as satisfy local in-country costs requirements, including obtaining local Bank Guarantee to support related Loan Facility.

The U.S. Loan will have medium term tenure of over 5 – 7 years, at an interest rate of 2.0% above Six Months Floating LIBOR (London Interbank Offered Rate).

To start -up the process of obtaining required Funding, the promoter is required to retain the services of Financialbridge and pay negotiable Retainer/Business Development Fee to instrument and procure the U.S. Funds. Following receipt of the payment, Financialbridge will develop a Bankable Business Plan that will satisfy U.S. Export Financial Market requirements and procure the Project Loan.

The Fee will further cover service coordination of Project Loan Packaging and Procurement that will involve the Borrower and the U.S. Lender. The Engagement Fee is refundable in full if the Loan is not procured after the promoters satisfy all the statutory U.S. Financial Market requirements, as outlined under the scope of responsibilities of the business promoters.

The U.S. Lender will underwrite the submitted statutory documentation leading to Loan approval, following which the Lender will request the U.S. Ex-Im Bank for issuance of Political Risk and Medium-Term Insurance/Comprehensive Credit Guarantee before disbursement of related Loan.

The process of underwriting the Loan through approval and disbursement could be concluded within 45-90 days after the U.S. Lender receives the complete statutory documentation as outlined.

Once the loan is approved, Financialbridge will charge a Loan Procurement Fee of 5-7% of Loan amount aid by the U.S. Lender and added to the cost of the Project.

Scope of Responsibilities of Financialbridge and the Promoter/Borrower:

1. Financialbridge shall be responsible in carrying out tasks that will result in the successful procurement of U.S. Loan for the implementation of the Project in Nigeria, including:

1.1 Conduct of Feasibility Study and preparation of Bankable Business: Plan that will satisfy U.S. Export Financial Market requirements. The Business Plan will be concluded within 30-45 days from receipt of Engagement Fee, Data from Market Research as well as Borrowers information. The draft of the Business Plan will be forwarded to the promoter Company for approval and possible input before product ion of final Document.

1.2 Turnkey Packaging, Qualification, Documentation, Sourcing and Procurement of Project Loan from a U.S. Lender, utilizing Ex-Im Bank Comprehensive Guarantee.

1.3 Processing, Due Diligence, Approval and Disbursement of Project Loan within 45-90 days of the U.S. Financial Institutions receiving and underwriting complete statutory documentation from the promoters.

1.4 If required, Financialbridge can also be engaged to Package and Instrument Private Placement of Shares of Common Stock of promoters’ company to raise additional funds through Private Equity Investment, utilizing a local Nigerian Bank as Issuing House.

The Funds raised through the Private Placement could be applied to fund Local Project Site Development / In-Country Costs as well as required Equity Contribution, etc.

2. Promoter / Borrower: The promoter/borrower shall be responsible for the following within the requirements for successful Loan Procurement, including:

2.1 Obtaining Nigerian Bank Guarantee for 85% or 75% of the total U.S. Loan amount to fund the Project, depending on the Ex-Im Bank requirements.

2.2 Securing all required Permits and Licenses from Nigerian Regulatory Authorities

2.3 Submission of Three Years Audited Financial Statements of the Nigerian Bank as certified by a renowned Accounting Firm.

2.4 Provision of Equity Contribution of 15% of total U.S. costs content within the overall Project cost for U.S. Ex-Im Bank Guaranteed Loan to be added to 85% of total U.S. cost content as Loan.

2.5 Funding of all Professional Fees, including U.S. Lender’s and Ex-Im Bank Project Underwriting and Loan Closing Fees.

2.6 Payment of Retainer/ Business Development Fee to Financialbridge for Loan Packaging, Qualification, Processing, and Procurement, including development of Bankable Business Plan to satisfy Lenders requirement for related Loan.

Exclusions and Responsibilities of Project Promoters:

1. Local Taxes, Custom Duties and VAT (into the destination country)

2. Port Clearing of Plants, Machinery & Equipment and Inland Transportation to Site

3. Construction Authorizations and Permits

4. Connections to the Local Networks (Water, Electricity, etc.)

5. Visa Processing and In-country Room & Board for Expatriate Engineers in the duration of Construction & Erection.

6. Security for the supplied equipment at site and U.S. Expatriates