2020 and into 2021 has presented major challenges for most businesses, FilmCabbage included. Our regular 4-1 program went on hold for a time in 2020 (in that we weren't taking any new applications) as many of our required banking processes were seriously affected by COVID-related issues: even today some of those banking processes experience delays.
The advantage to having this downtime has been the continuing evolution of our lending programs. We introduced our Asset Backed Line of Credit program last May, followed in the late summer by the SBLC 100% Funding program. We have also continued to improve the 4-1 Lending Program, now to the point where the security behind all client-related funds is as iron-clad as we can make it.
For clients seeking a $40M+ loan (so their initial funds ready to deploy into the program would be $10M or more) we've made it possible for clients to keep their funds in their own bank accounts, if the accounts are set up in the appropriate way. Additionally, for clients whose initial funds are less than $10M we have changed that process in such a way as to offer them the best possible security.
Previously we had those deposits going into Law Firm escrow accounts, secondarily secured by SKRs (safekeeping receipts) backed by our gold holdings with Brinks and G4S. We experienced a few logistical issues with that across 2020 and as a result have an even more secure method in place moving forward. Rather than law firm escrows, client funds are now held in the safekeeping account of a US-based commercial bank, fully regulated as a bank by the BSA (Bank Secrecy Act), AML (anti money laundering) protocols and Fincen (Financial Crimes Enforcement Network). This bank acts as the safekeeping agent, and houses these deposits in their account with the Federal Reserve Bank in Kansas City. The commercial bank provides to the depositor a letter confirming that they will hold the funds per the deposit agreement (that the client has signed with FilmCabbage), assuring the client that those funds can ONLY be moved back to the account they were wired in from, and confirming the terms in which the deposit will be returned.
Our program continues to evolve, both for the security of our clients but also to provide better security for FilmCabbage, all of which leads to much easier and simpler client relationships and facilitation of projects.