This is accomplished by identifying those financing sources whose
investment criteria best matches the funding requirements and objectives
of our client companies. We consider all businesses in all
Should your company wish to explore the possibility of accessing U.S.
private equity financing, Gailforce Ventures would gather comprehensive
details about your company's business strategy, financial history,
management, growth opportunities, markets, competitive forces and
capital requirements. We would then assess the financing need and
determine if Gailforce Ventures' professional services are compatible
with the investment opportunity. If so, we would ask the company to sign
an engagement letter which sets out the terms that will guide us toward
a successful completion of the financing process.
Gailforce Ventures would commence the process by preparing an
exciting executive summary describing the business opportunities that
are available to the company and prepare a confidential information
memorandum which will contain a descriptive and concise overview of the
Then, through direct communication (telephone, fax and e-mail), we
would further qualify the potential sources to identify those that are
interested in the investment opportunity described in the executive
summary of the business plan. At this point in time we would provide you
with a list of firms which have expressed a preliminary interest in the
investment opportunity. This affords you an opportunity to select which
firms you would like to possibly become associated with and to
prioritize the order in which the firms should be contacted.
Confidentiality agreements would be executed prior to identifying the
company and providing them with a copy of the confidential information
memorandum. The subsequent follow up and communications with these
groups would ascertain which firms would be appropriate to arrange a
meeting with. The purpose of the meeting would be to move the discussion
forward first to a written expression of interest, and then a letter of
intent. The effort would be concentrated and very focused over a
relatively short timeframe. We believe this approach ensures the
greatest probability of success in the shortest period of time.
Finally, Gailforce Ventures possesses relevant experience in the
field of corporate acquisitions and divestitures, and have extensive
business experience both in Canada, the United States and Europe which
allows us to facilitate the successful consummation of the investment
Asset-based lending has experienced rapid growth during the past
decade. What was once considered a minor part of financial services now
challenges traditional banking in the most vibrant part of the United
States economy. As Canadian corporations become increasingly familiar
with asset-based financing, it is envisioned that asset-based lenders
will challenge the Canadian chartered banks and enjoy the same success
as they have achieved in the U.S.
The theory of asset-based lending, matching a company's assets to its
borrowing needs has passed several tests:
Asset-based financiers have proven to be reliable and
supportive during difficult economic downturns.
They have provided loan packages well above the $100 million
They have proven adept at serving almost every industrial
sector and every geographical location.
An asset-based lender makes it possible for companies to finance
their business with collateralized loans. Unlike banks that rely
heavily on balance sheet ratios and cash flow projections as loan
criteria, asset-based lenders use a client's business assets as the
primary basis for lending. The result is usually far greater
borrowing power than can be achieved from chartered banks and without
the restrictive covenants or guarantees frequently required by the
Asset-based financing can carry companies over difficult economic
cycles, enabling them to strengthen their financial position, grow and
achieve their ultimate goals. The loans asset-based lenders make
are constantly at work, because they function as a revolving credit
line. And unlike the chartered banks, the revolving line of credit
from an asset-based lender is on a "committed" rather than on a "demand"
basis. As a company grows the amount of funds available increases
with the increase of the collateral without any concerns about
maintaining debt-to-equity ratios. Another important aspect of the
approach used by asset-based lenders is that prospective borrowers do
not have to be profitable or have a minimum net worth. A business
with tangible assets and competent management can use its assets to
create additional working funds to help carry out its business plans.
Manufacturers, wholesalers, distributors, importers, retailers and
service-oriented businesses are all candidates for asset-based lending.
Guidelines for Asset-based Lenders
|Amount: ||$5 million to $200 million (Canadian or U.S. dollars). |
|Availability: ||Up to 90% of eligible accounts receivable (Canadian, American or
Up to 85% of eligible inventory (raw materials and finished goods).
|Purpose: ||Refinancing, restructuring, leveraged buyouts, cross border
expansion, management buyouts, turnarounds and recapitalization,
rapid growth situations |
|Loan type: ||Operating (revolving) lines of credit secured by accounts
receivable and/or inventories |
|Term: ||Operating lines of credit are available on a "committed", rather
than the conventional "demand" basis used by banks. |
|Flexibility: ||Flexible financial structures. The integrity and ability of
management as well as the quality of collateral weigh significantly
in all transaction requests and take priority over ratio
deficiencies and financial performance. |
|Pricing ||Transactions are priced based upon commensurate risk as well as
collateral quality and normally fall within the Prime +.75% to 2.5%
|Collateral: ||Asset-based loans are backed by many types of collateral: |
* accounts receivable
* machinery and equipment
* real estate and certain tangibles
In general, asset-based lenders are not burdened with the red tape,
rigid rules and ratio dominated default clauses. They are geared
to processing new business that cuts through the bureaucracy found in
most large chartered banks and to achieving long term relationships.
Gailforce Ventures would be pleased to review your financing
requirements in order to determine if asset-based financing can help you
with additional cash liquidity from receivables, inventory and other
assets to finance new business opportunities and future growth.