The synergy created out of the alliance of the third party security lender and borrower can be better explained with the following illustration:
A real estate developer has built a commercial complex or residential apartments which are selling slowly and has became a compulsory long term investment. Such properties may not sell at right price in a stressed market or leasing such assets also may become difficult. Also raising institutional loans on such properties becomes difficult as the cash inflows out of such properties cannot be reasonably estimated. On the other hand there is a good pharmaceutical company with established track record of business, profitability and management and has ability to raise finance for its business and is short on collateral security. While for the lender of the security, holding of the asset is a problem and is unproductive, it is a solution for the borrower of the security.
The borrower can mortgage the third party (borrowed assets) and can productively utilize such asset and generate very good returns from the borrowed money for himself and pass on the benefits in some agreed manner to the asset owner. The returns to the original owner of the asset can be in form of some agreed returns per month, annum or stake or position in the management of the borrower entity or mix of them.
Our portal provides a platform where a lender of the security can list its offer to lend security along with the terms and conditions of the deal and return expectations for nominal listing fees. The listing can be accessed by various registered borrowers of the security and other financial intermediaries. Similarly , a borrower of the security can list its requirement of a collateral security along with the return offer and access database of the registered security lenders. in case of listed subscribers , Both listed parties have to negotiate, take help of legal counsels and seize the deal at their own.
Our fees based services include taking specific mandates for identifying a suitable asset or security for the borrower who need them and also arranging finance for such a transaction. Our team will conduct a title and legal search of the property and also the valuation and marketability of the property. We also vet the lender of the security for his previous borrowing records and CIBIL check. We shall try and negotiate a deal between the borrowers and lenders of the collateral's and help them to execute a 'win –win' deal. For a lender of a security, we find a proper borrower. Our team will carry out a thorough due diligence of the borrower of the security including financial, legal, operational, financial standing, existing banking relations, financial ratings, market information and govt compliance. We shall give our report to the security lender who can take an informed decision to lend the assets and become a part of the borrowing programme devised by the borrower. Our legal team will also help to prepare suitable agreements and culminate the formalities of the transaction. we shall also arrange debt for such a transaction and culminate the deal.