The Multiples Lending Program
PROGRAM SUMMARY
Offered to select clients since 2005, the "Multiples Lending Program" provides financing based on a multiple of the amount of funds already raised for the project. The project owner provides a POF (Proof-of-Funds) showing the amount already raised, and we fulfill the budget by lending them a multiple of that amount. Our acceptance rate is considerably higher than institutional lenders - as long as our analysis of your project suggests it will be able to generate sufficient revenue to repay the loan, it is one we would consider lending to.
This program provides loans up to 4X of the amount of funds already raised. The minimum amount required to qualify for a loan up to 3X is $10M USD or Euro; the minimum amount to qualify for a loan up to 4X is $100M USD or Euro.
For example, if your project will cost $30M, to qualify for a loan to complete that entire budget you will need to have already raised $10M (3X). If your project will cost $400M (eg for a large slate), to qualify for a loan that size you will need to have already raised $100M (4X).
** The $10M minimum makes it difficult to lend to productions with budgets under $20M USD, unless they are part of a larger slate. We do an alternate program for smaller loans (loans starting at $6M USD) - please see the "Small Cap Program" page for details **
In order to receive a loan in the Multiples Program, once your application has been approved you will need to have your initial funds set aside in safekeeping; for amounts over $100M they can usually stay in your own account, and our bankers will work with your bankers to "block" them until the loan cycle is complete.
For smaller amounts we will refer you to one of the Asset Protection attorneys we have pre-qualified for the program (all attorneys involved have decades of experience in the asset protection field, are easily vetted, and have impeccable reputations). They will work with you on an escrow agreement, and they will hold the initial funds in escrow until the loan cycle is complete.
If you require even further levels of protection, we will refer you to one of the major international insurance companies we work with for this program (all are household names) who will full insure your funds for the duration of the loan cycle, for a very small premium), and they will hold the funds in safekeeping throughout the loan. This gives you the security of a full value insurance policy, if you need more assurance than the asset protection escrow.
COLLATERAL and SCHEDULING
Unlike standard institutional loans, the collateral we require is ONLY THE PROJECT YOUR LOAN WILL BE USED TO PRODUCE. No additional corporate or personal guarantees are needed, and your initial funds are NEVER used as collateral. If the project fails and you are unable to repay the loan, you only lose the project itself. You never have to worry about losing your funds, your house or any other assets.
Since the first several tranches will be released to you before the project has any real value (since there is no hard collateral yet) funds are tranched out gradually, starting small and escalating as the project accrues value. A typical loan will take 10-12 months to become fully available, with monthly releases sent to the borrower based on their use-of-funds schedule.
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Interest is due only on amounts already drawn.
TO QUALIFY FOR FUNDING:
To be eligible for funding, your project must fit the following criteria in full:
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Your project must have its production elements fully established. A complete business plan must already be in place. If you only have a script but no budget or production plan, you are not yet ready to be funded. Your project doesn't necessarily have to be ready to produce immediately, but it should be ready to go.
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Minimum funds are already raised. Whichever multiple you are applying for (3X or 4X) the funds must already be in place, unencumbered, and available to be (a) blocked in your bank account or (b) held in escrow.
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Timing. All loans must be approved through a rigorous banking compliance process, which will take approximately sixty days. If you require funds immediately, your project will be rejected. Additionally, loan funds are released in traunches as they are consumed into the production, so it will take 10 to 12 months for them to be fully deployed.
INTEREST RATE
Not only do we provide you with up to 4X multiples of the amount of your capital as a credit facility, but we do it at very reasonable rates. If your loan is a 3X or 4X multiple, your interest rate will be 6.5% per annum.
RISK MITIGATION
We have designed our loan process in a way to ensure that your initial funds are not exposed to undue risk. Those funds will sit in your own bank account, in a fully regulated trust/escrow account or (if you decide on the "fully insured" option) with an internationally renowned insurer throughout the entire loan process.
To apply for funding for your Project, you will need to submit an application package, but prior to doing so you should first contact us to discuss your project and review its business plan to make sure that it appears to be a good fit for our program. If it appears to be, we will provide you with all of the required documents to submit to complete your application package.
Once your application package is submitted, our intake and risk assessment team will review the submission. If your project is accepted for financing, you will receive a Loan Offer describing the loan we are willing to provide. Once accepted by the borrower we will issue a term sheet to confirm that we're "in", and willing to fund your project, as long as our loan terms are accepted and the process steps are followed.
INTEREST PAID ON INITIAL FUNDS
While your initial funds are in safekeeping (no matter what option for safekeeping is used), we pay you a rate of 5% per annum on your initial funds to ensure they earn during the time they are in safekeeping. The interest we pay you can be used to defray the interest expense of the loan, be used toward the principal outstanding, or you may simply want it sent directly to you. You will define what you want to be done with your interest.
FEES
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Unlike institutional lenders and most private lenders, we do not have ANY up-front fees:
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No engagement fee, no due diligence fee, no application fee
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There will be a 3% "Lending Fee," due only after the close of the deal and commencement of loan disbursements
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This fee is deducted from the initial tranche - never from your original capital.
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We pay our costs, and you pay yours. As is standard for any loan, the borrower is responsible for the legal closing costs. Closing costs will be disclosed in your Term Sheet, but never exceed 1% of the loan amount. Once the term sheet process is complete and the initial funds in safekeeping, you will pay a minimum amount (usually $30,000 USD) to our appointed law firm to draw up the loan contracts
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Throughout the loan term there will be a small monthly accounting fee for a loan oversight custodian who will liaise with you monthly to ensure funds are being used appropriately and the project is on track for completion as scheduled. This fee will be fully described in your Term Sheet.
HOW TO APPLY
The process to apply for and receive financing from FilmCabbage is as follows:
STEP 1: Contact us to discuss the details of your project so that we can determine if it suits our lending model. If it does, we will provide you the applications and documents you will need to apply for a loan.
STEP 2: Submit your "Pre -Approval" package. The items required are:
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Proof of funds
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Funds Owner's KYC information (we will provide the form to complete) and copy of passport
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Executive summary of the project to be funded.
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Proposed drawdown schedule / use of funds schedule.
With these items, we will be able to determine if we can furnish your loan and, if we can, we will provide you with a "Loan Offer". If you accept our offer, we would move the step three.
STEP 3: Submit your full application package. This will include (in addition to the documents already provided in the "Pre-Approval" stage):
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Full Project Business Plan o complete)
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Loan Application Form
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Initialed and signed FAQ document
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If the borrowing entity is a corporation, provide the Articles of Incorporation.
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If the borrowing entity is a corporation, a Board Resolution (stating the signatory for the company has the ability to bind the corporation to contracts).
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Letter From the Investor Posting the Initial Funds (if applicable)
STEP 4: You are sent your comprehensive "Term Sheet", outlining the primary terms of the loan. Once both parties agree to terms, both sign the Term Sheet to proceed to the next step.
STEP 5: POSITIONING OF FUNDS IN SAFEKEEPING
There are multiple ways to accomplish the positioning of funds in safekeeping (see the section "Financial Safekeeping" below). Once your initial funds are positioned appropriately, there is a 60 business day compliance period where our insurers and banking regulators examine and approve the loan file, create the credit facility and complete any required underwriting.
STEP 6: During the compliance confirmation we provide you with a document for you to formally request the generation of the loan contracts. Once you request the contracts to be generated, you will be required to provide the minimum amount to have the contracts created, which will be sent to the law firm creating the contracts.
STEP 7: Once the contracts are completed and compliance has approved all elements of the loan, your facility is opened and disbursements can commence.
FINANCIAL SAFEKEEPING
The primary element of this program is that to qualify for a loan the minimum initial funds must already be raised. It is the existence of the borrower's project, coupled with those initial funds being set aside in safekeeping in a regulated environment, that makes the loan possible.
The only requirement of those initial funds is that they remain in safekeeping throughout the loan term. If they were to become otherwise encumbered or depleted, it would violate compliance requirements and cause the loan to collapse. As a result, to ensure compliance with all banking regulations, there are specific methods and oversight required to ensure that they remain positioned appropriately throughout the loan term.
Below are the approved methods for this safekeeping assurance.
METHOD 1. THE BORROWER'S INITIAL FUNDS ARE HELD BY A MAJOR INSURANCE COMPANY DURING THE TERM OF THE LOAN.
Once the term sheet has been completed, we connect you with one of the approved insurers for this program (all insurers are household names, but files are assigned to insurers on a case-by-case basis). They will provide the borrower an insurance policy for the full value of their funds. Once the depositor approves the policy and pays the insurance premium (anywhere from 0.25% to 0.8% of the funds being placed in safekeeping) their funds would be transferred to the insurer, who will hold them with full fiduciary responsibility through the end of the loan cycle.
METHOD 2. THE BORROWER'S INITIAL FUNDS ARE HELD IN A LAWYER'S TRUST/ESCROW DURING THE TERM OF THE LOAN.
The initial funds are moved to the trust/escrow account of an asset protection attorney, where they must remain for the duration of the loan. We will refer you to a highly reputable, easily vetted Trust Attorney who will work with you to position the funds appropriately. FundingNet covers all costs of the escrow service.
METHOD 3. BORROWER HOLDS THE FUNDS IN THEIR OWN BANK ACCOUNT IN THEIR OWN TOP TIER BANK.
(available only for amounts in excess of $100M USD or Euro)
Due to the trouble often experienced with moving such large amounts, our bankers will work with your bankers to block the funds in your own account, ensuring that they cannot be moved or otherwise encumbered during the loan cycle.
METHOD 3. SBLC or BANK GUARANTEE – MINIMUM $10M USD or more (initial funds remain in borrower's bank account, and a SBLC / BG / CD issued by their bank)
Utilizing this process we can ONLY work with Top Tier Banks in highly stable banking jurisdictions.
Here the borrower/investor's capital remains in their bank account, and that bank would issue a “bank instrument” such as a “SBLC” (Standby Letter of Credit) or “BG” (Bank Guarantee) to our designated banking partner. The bank instrument would be set up as a "returnable instrument", so the issuing bank can have full assurance that it will be returned in full value and without encumbrance at the end of the term. Your banker will be able to offer you the appropriate assurances that your capital is completely secure at all times.
Keep in mind that your issuing bank will charge fees to create, issue, and recall and liquidate these instruments, and those costs are fully the responsibility of the borrower. Both banks (issuing and receiving) will set up the transaction in as way that the SBLC/BG will be held by the receiving bank until the loan is repaid in full; at the end of the term it will be returned in full value and without encumbrance.
SBLCs/BGs are typically discounted by the receiving bank (as the funds are not held in their institution). In most cases the value of this instrument will be discounted to 80% of the face value, and the amount of the loan multiples based on the discounted amount.
Please note: this process is meant for clients that have a high level of sophistication in banking and finance, and who will deal directly with bankers who have extensive experience in setting up such instruments.
METHOD 4. RATHER THAN CASH, THE BORROWER HAS A TOP CRYPTO CURRENCY TO USE AS THEIR INITIAL FUNDS.
If the client has sufficient holdings of a top crypto currency (such as Bitcoin or Ethereum) it can be used instead of cash. We CANNOT work with anything other than the top crypto currencies. The details of how that would be handled to ensure to the client that their crypto is at no risk of loss will be covered in the Loan Offer.
METHOD 5. RATHER THAN CASH, THE BORROWER HAS GOLD HELD BY A TOP TIER VAULTING COMPANY
Here the borrower has gold vaulted with a top vaulting company (such as Brinks, G4S, etc.) in a highly reputable jurisdiction. The vaulting company would issue a SKR (safekeeping receipt) for the appropriate value of the gold, for the length of the loan term. Your vaulting company will be able to describe how SKRs work, and how this does not in any way put those assets at any risk. Details of how this would be handled are available on request.
For safekeeping methods, FundingNet / FilmCabbage will credit the depositor at a 5% per year rate for the entire time that the "QC" remains in safekeeping, to ensure that the client minimizes their lost opportunity cost.
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These safekeeping processes have been developed using best in partners and processes to mitigate risk for both ourselves and the client, while adhering to all required compliance and legislative requirements. Each of the processes described will be fully verifiable by the borrower as we proceed through the loan application and setup processes.
If you have any questions about FilmCabbage's safekeeping processes, please contact us today.
Click the link below for a 'flipbook' highlighting the major elements of our Multiples Program: