Business – Shipping Loans
There are many types of funding.
1)America Fund , which provides funding outlined below:
Loan Term: One to three year’s interest only with no prepayment penalty.
Collateral: Typically, commercial real estate. Other fixed assets may be considered in some cases.
Loan-To-Value Ratio: Loan amounts can be up to 65% of the value of the collateral. If the loan is used
for construction or renovation, the loan can be funded in stages up to 60% of the
Interest Rate: Depending upon collateral, rates start at 9%, interest only. In lieu of equity, a fee of
2-7% may be paid.
Minimum Loan Size: $3 million.
2)By a collaborative investment agency/ bank with experience in the Greek market, which can be characterized as a Placement Agent able to find investors for any project through a process which takes 4-6 months.
The general characteristics are outlined below:
The placement agent is a full service global investment bank serving large and middle market companies throughout Europe, Africa, Latin America and East Asia.
The placement agent advises clients across all private market sectors (specialty focuses on agriculture, infrastructure, logistics, transportation, mining, manufacturing, oil & gas, consumer, healthcare and financials) seeking to raise $10m – 200m+ in equity, convertible and/or debt capital. Equity offerings typically contemplate an exit through IPO or private sale in years 5 – 7 and focus on the following investment segments:
Venture:Management teams with no current operating entities or assets seek capital based on their proprietary market access and/or knowledge
Growth:Management teams of current operating entities and/or assets seek capital to grow their business
Recapitalization: Part and/or whole owners seek to sell their interests and/or shareholdings of current operating entities and/or assets
Distressed:Owners of current operating entities or assets facing
excessive leverage raise equity capital to extinguish unmanageable debt
Generally, pricing guidance is 8-12% for senior debt, 12 – 16% for subordinate debt and 17-22% for equity. Debt pays current interest. Equity makes no current payments and the return is back ended to 7 – 10 years after investment when investor sells to another investor or back to management. Terms generally include forms of initial control regardless of economic ownership that are relieved as management meets specified milestones.
A typical equity raise requires 4 – 6 months (the time begins to run after you contract with the Fund).
The placement agent charges both advisory fees (upfront fee) that range between $30,000 – 50,000 (paid in two instalments) and success fees (1,2% for debt; 4,5% for equity) paid on funding.
3)The financing of business plans by major European banks.
The funding application is made after the bank familiarizes itself with the trading behavior of each client.
The acquaintance of the client with the bank takes place through the creation of a business bank account and its activities.
4)Shipping finance by the means of European Banks:
Bank’s standard conditions for ship financing are as follows:
Assets for finance: transport vessels not older than 25 years (20 years for tankers) by the end of loan repayment term
Amount: from USD 2 mln
Proportion of loan: up to 70%
Interest rate: from 6-9% p.a.
Currency: USD / EUR
Term: up to 5 years (repayment schedule of up to 10 years) Bank commission: 1% Main security: Vessels, Share pledges, corporate guarantees, personal guarantees of the beneficiaries Main additional conditions: 100% of turnover through accounts opened in the Bank Borrower is responsible to cover all legal fees (abt USD 30.000 for one vessel + abt. USD 5.000 each additional vessel) Loan agreements in accordance with English Law.
In the above options, when the client’s own contribution is 30% the process of raising capital through funding is easier..
5)Funding through Letters of Guarantee for amounts over 100 million.
Often referred to as BG Mechanism, since it includes the issuing and liquidation of the guarantee letter.
ΤOur office takes 10.000 € as commitment fee, which is refundable to the client until the client enters into a contract with the bank (or the Fund)
After the signing of contracts that money is then non- refundable and converted into consultancy services.
On loan disbursement, our company receives a 2% success fee.
6)Forming An English company :
This gives you the ability of applying for funding from British banks as a Startup company- Terms and Conditions apply.
Contingent on your requirements, we can recommend the option that best suits you.
In addition, having developed a comprehensive network of partners throughout Europe, we can find personalized solutions for your company
Mortgage in London from a foreign bank
-Purchase of property in the United Kingdom
-Refinancing – same investment on a property in the UK,
-other reasons to be discussed in advance with the bank.
The property to be acquired will be used as a guarantee as well as any other property belonging to the client.
The main terms of the funding are:
- Type of credit : Mortgage loan
- Borrower: Person non- resident in the United Kingdom. On the condition that the borrower is a legal entity.
There are no set conditions, each application will be considered separately.
- Loan Currency: Pound Sterling (GBP), Euro
- Loan Amount : 700,000 Euros or more
( or equivalent amount in another currency)
- Higher loan amount of 14,000,000 euros
- interest rate: 6% or more and is determined according to each separate case
- • Loan Term:
For loans in pounds sterling (GBP) up to three years while for loans in euros or dollars up to five years.
The monthly payment is calculated by a loan term of 15 years in order for it to be kept low.When the installment payments are made regularly and on time, the repayment period can be extended up to 15 years.Otherwise, the outstanding amount of the loan is payable in 3 or 5 years as outlined above.
- Guarantee: Property in the United Kingdom. However, the bank does prefer the property to be located in a major city.
- LTV min 60-70%
- Own contribution to be at least 30% of the market value.
The source of funds should be able to be adequately validated by supporting documentation
- The property to be purchased to be used as a residence, not necessarily by the buyer.The buyer can lease it, but only as a residence
- Initially the bank requires a detailed description of the property (assessment, photos etc.).
The assessment should be done by a well-known and qualified assessor’s office. The bank recommends the following offices (Knight Frank, Colliers, Savills, Clutton etc.). However, others can be used once they have been approved by the bank.
The property to be mortgaged must be insured and the relevant supporting documentation of this to be presented to the bank.
The bank charge in order to process the application and formalize the documentation for the issue of the loan is 2 % of the amount of the loan.
Their fee for early repayment of the loan is 2 % of the amount repaid early.
The advisory fee of our office is 1,000 euros and the success fee is 1 % of the amount of the loan.