Collateral Management Services (CMS) is an alternative approach to asset-based funding and financing. As an asset enhancement program the recipient of CMS can mitigate risks associated with non-asset-based financial instruments.

The CMS program provides the subscriber with a way to reduce borrowing and financing risk by backing the obligation with cross collateral assets so that the lender or investor mitigates and reduces his or her risk.

By subscribing to CMS the company reduces the cost of money and the amount of equity surrendered by backing the funding with cross-collateral established through the CMS service agreement.

Similar to a surety or performance bond CMS provides assurance that the underlying assets or collateral for an investment or loan remain backed by cross-collateral agreements if the underlying assets become compromised.

Most CMS subscribers can use this service to back funds that are supplied to them from funding sources. Whether the funding source is provided by the subscriber or by CMS the capital provided by that source is backed by the Collateral Builder Program that is suitable for subscriber. Dollar-for-dollar the funds are backed through the CMS agreement.

Many companies do not qualify for traditional asset-based funding or lending. In today’s market they can expect to pay high fees, interest and commissions that make it next to impossible to obtain the needed funding.

Investors require high equity and sometimes management participation with personal guarantees of the company principals. Lenders require the pledge of stock, assets and personal guarantees.  Interest alone on loans range from 10% - 15% per year. On a ten-year loan they could pay 100% to 150%  (10-15% APR) on the note over the term of the note. An equivalent CMS Collateral Builder Program fee is from 4% to 7% per year.

Application:  

• Reduce fees and interest for get asset-based bank financing

• Mitigate risk from investment equity funding

• Alternative to hard money lending

• Reduce equity requirements for lending and investing

 Subscriber Programs:

Collateral Builder PLUS Program

• Setup collateral management service (CMS)

• Administer CMS program

• Provide guidance to board of directors and company principals

• Manage the collateral account

• Provide surety backing

• Introduce investor or lender

• Interface with accounting and tax counsel

Collateral Builder Program

• Setup collateral management service (CMS)

• Administer CMS program

• Provide guidance to board of directors and company principals

• Manage the collateral account

• Provide surety backing

• Negotiate with subscriber secured investor or lender

• Interface with accounting and tax counsel

Requirements & Fees:

• Annual membership fee (flat fee)

• CMS management fee (% of collateral backed)

• Origination fee(s)

• Stock warrants for 30% face value of collateral

• Collateral placement & insurance commission paid through brokerage

• Premium payments and administration costs

• Service deposit (non-refundable)

• Seat on company Board of Directors

• Trust and legal fees