Note Purchase Criteria
Note: These are general criteria; we evaluate each opportunity based on its unique characteristics in the context of the market. Therefore these criteria do not guarantee approval.
- Equity – must have controlling share - 51%+ - would consider claw-back position only after milestones have been achieved and all investment capital has been recovered.
- Equity structure of common stock or convertible preferred.
- Investment size of not less than $500,000.
- Articulated exit strategy.
- Mez Debt – subordinated with warrants and participating preferred stock.
- Projected cash on cash annualized ROI of no less than 30% inclusive of exit/liquidity event.
- Peak historical annual revenues not less than $5,000,000.
- Management team in place for 3+ years.
- Participation in active management, with clear organizational restructuring opportunity.
- Creditors willing to restructure bank and vendor debts.
- Company located within 3 hours of Orlando.
- Growth market in early expansion stage with clear product need/branding – scalability.
- Desired industries: education, health care services/devices/tools/diagnostics, biotech, outsourcing/information services, industrial equipment manufacturers, alternative/renewable energies, manufacturing, distribution, transportation, technology-MIS.
- Not considered: retail, mature stage companies, construction related companies, rapidly changing technology companies, financial lending companies, companies with environmental liability issues.
- Collateral located within 3 hours driving distance of Orlando.
- Collateral value supported by current appraisal/evaluations on the basis of fair market, orderly liquidation, or liquidation value as appropriate to each individual situation.
- Clear title and title insurance for all real estate.
- No impairment or environmental issues with collateral.
- Disclosure of any continent liabilities/no pending legal action or tax liens.
- Personal guarantees required, open to consideration of pro-rata or collateralized guaranties at a minimum of 150% of pro-rata amount.
- Minimum loan seasoning of 24 months prompt payment.
- Variable interest rates or willingness to modify to market rate.
- Loan maturity to match underlying collateral.
- Hold harmless agreement acknowledged by all parties.
- Leverage, liquidity, solvency and other standard covenants.
- Typical loan size of $500,000+.