| |
Structured Growth Capital |
Bank
|
Venture/Investors
|
| Funding Applications |
No Industry Limitations |
Traditional
|
Start-Up
Expansion/Growth/Mezzanine |
Recourse
|
No; Funding is non-recourse to borrower
|
Yes; Funding is recourse to borrower and often personal
|
Yes: Funding is recourse to borrower |
| Funding Scope |
$5 million and up
|
Limited by department and credit review committees
|
Highly variable and dependent on fund size
|
| Loan to Value |
100% net present value of future payment stream
|
Typically 10% - 50%
|
Typically 10% - 70%
|
| Interest Rate |
Fixed; Competitive |
Not Fixed; May be competitive |
Not Fixed; Not Competitive |
| Fees or Equity Grants |
None
|
Closing & renewable fees |
Typically Fees AND Equity |
| Time to close |
2 – 4wks |
90+ Days |
6mos – 18mos |
| Post Funding Reporting |
None
|
Quarterly
|
Monthly/Daily |
| Repayment Structure |
Customized to suit specific cash flow needs of project including option to defer start of repayment for up to 10 years
|
Restrictive/Rigid |
5-7 yr 10x Investment return expectation
|
| Covenants & Reporting to Credit Agencies |
None
|
Restrictive/Rigid
|
Extensive and complicated |
| Security/Collateral |
Assignment of unconditional promise to pay from creditworthy entity
|
1st Lien position on tangible assets |
Control |
| Oversight |
None
|
Audits, frequent reviews – life of loan
|
Board representation |
| Documentation |
Efficient – prepared in-house
|
Litigious and Extensive |
Litigious and Expensive |
| Relationship Dynamic |
Team/Collegial
|
Supportive relationship manager , adversarial senior management
|
Adversarial
|
