Plate/GCGC News Letter - 2/14/22 Due Diligence Breakdown, loan terms, etc.

Warm Greetings: In the quest for funding, there are many things you need to know such as having a complete & highly detailed set of documents on the deal prepared by a qualified 3rd party to make the deal bankable, along with the deal it self being fully ready with collateral or insurance. 100% funding is for the development / acquisition / recapitalization, but not the pre development / acquisition / recapitalization costs. Please note that you need a current fully bankable comprehensive complex feasibility study with a investment grade business plan & all financial models, along with being shovel & fully ready to get funding.

Someone doing due diligence on behalf their financial partners, prior to submitting documents to them, are responsible for confirmation of the project owner, documents and the status of properties/projects. They must complete the Due Diligence forms on the site visit while providing them, along with photos of the project, project owner, to their financial partners. Otherwise, your project will not be reviewed and will be rejected.

This introduction to due diligence covers the basics concerning due diligence. Please pay attention to the following:

What is Due Diligence?

Due diligence is used to investigate and evaluate a business opportunity. The term due diligence describes a general duty to exercise care in any transaction and spans an investigation into all relevant aspects of the past, present, predictable future of the business of a target company. Due diligence sounds impressive but ultimately it translates into basic common sense success factors.

Due diligence is an investigation & audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material. It refers to the care a reasonable person should take before entering into an agreement or a financial transaction with another party.

Due diligence can also refer to the investigation an investor/bank does of a project owner. Items that may be considered are whether the buyer has adequate power to get financing for the project, as well as other elements that would affect the acquired entity or the investor/bank after the investment has been completed.

In summary, duty of the investor to gather necessary information on actual or potential risks involved in an investment. Due diligence is an investigation of a business or person prior to signing a contract, or an act with a certain standard of care.

Why is Due Diligence Conducted?

There are many reasons for conducting due diligence, including the following:

• Confirmation that the business is what it appears to be.
• Identify potential “deal killer” defects within the project to avoid a bad business transaction and non-financing of the project.
• Gaining information which will be useful for valuing assets, defining representations and warranties, and/or negotiating pricing & the interest rate.
• ?Verification that the transaction complies with investment or acquisition criteria.
• The Due Diligence phase of a transaction is conducted in the order specified on our checklists and worksheets, to summarize information found in conducting thorough review to verify the project owner, seller’s title and the status of any and all properties/projects.
• Conducting proper Due Diligence may serve as a strong legal defense to any claims after a transaction closes. Due diligence may also reduce legal issues by alerting a purchaser or investor to potential liabilities that can be mitigated in various ways prior to closing the transaction.
• The Due Diligence Forms are used to close a transaction or get financing for the projects, as provided in a Purchase and Sale Agreement.
• It often occurs that a project is excellent, however due to lack of a few documents it will not receive funding and will be rejected. Usually, financial institutions & banks will not tell you the problems of your project and the reason for rejection.

Who Pays for Due Diligence?

The loan process often does not proceed beyond the point where the lender/investor notifies the loan seeker that he/she will have to bear the costs of performing due diligence on the loan evaluation. Commercial Loans Funding is a more complicated process than getting working capital for the small business. You, the loan seeker, are asking lenders/investors to risk their money on your project.?The lenders/investors expect you to come into the transaction with a strong financial statement, experience in the related business and collateral to secure the loan. Some are legitimate costs incurred in processing your loan application. You must be realistic here. It will cost money for a lender/investor to thoroughly evaluate your commercial loan proposal. The lenders/investors are not going to pay these costs for you. You, the loan seeker, are expected to be financially capable to pay any due diligence costs incurred, in order for the lending process to continue.

Why Can’t The Loan Seeker Pay The Due Diligence Fees At The Close Of The Loan?

The investigation and evaluation of your loan application may often require travel to your project site, meetings, appraisals, permits, legal fees, etc.?Third parties, such as appraisers, accountants, architects, consultants, engineers, lawyers, surveyors, and government officials are needed to accomplish these tasks.?Each one of these professionals has to be paid for their work at the time the work is completed. Look at it from the lender/investors’ perspective. If they review hundreds of loan proposals each year and the cost of evaluating those proposals range from $50,000 – $200,000 per loan proposal, you can see that bearing those costs could not be sustained by any lender/investor.

Special Notice about the first site visit (project inspection):

1. After receiving the full package(s) for the project(s), the owner of the project should invite the DD team for a face to face meeting, physical site visit for the project(s) and the signing of all required contracts. The owner of the project also has to sign a confidentiality / non-disclosure / non-circumvention agreement, to protect mainly their interests at this early stage. It is ascertained beforehand whether a project is worthwhile to pursue, as no one will wish to waste their time.
2. The site must be visited and ownership must be proven by the applicant.
3. Its mandatory a meeting with the Client occurs on site (a legal verification requirement).
4. The first site visit should be done by at least 1-2 senior executives from the company engaged to facilitate funding which remains mandatory for legal reasons and serves to:

• Meet the client, as well as any partners or management teams and physically verify the accuracy of the project ideas proposed.
• View the site(s) and its surroundings with the client.
• Meet local officials and to ascertain to what extent this project is known of and welcomed.
• View all plans/studies/documents/drawings/tests/surveys, as completed and are available, and esquire about planning & building laws enforced locally.
• Confirm all future procedures/timings/requirements with the client, as well as assisting in determining the future development costs and timing issues.

1. Many general project questions cannot be answered UNTIL A MEETING HAS OCCURRED AT THE SITE VISIT, as executives unable to deviate from this procedure.
2. After completion of a site visit, there will be the issue a written observation report, free of charge, summarizing all the findings and an outline moving forward.
3. At the site meeting, the aim is to meet the executives, view the site, meet local authorities, etc. Then from a definite view of how to recommend to the client to proceed. We also look carefully at the proposed future management structure. All in all, we verify the client’s position, the projects existence, past statements made by the client by means of the written meeting agenda issued beforehand.

Rates: 2-4.5%

Tenure: 1-20 Years.

Grace Period: Up to 60 months

Amounts: 20M - 100B USD ( 10M USD min on a case to case basis)

Type: Simple interest loan , debt finance, equity finance, line of credit, etc.

Area: USA, Canada, Europe, and some other parts of the world.

Success Fee: 1-5.5% ( loan amount can be increase to cover this cost )

Costs : Loans are for 100% of the development, but will not cover pre development costs to get project ready with a highly detailed set of documents, collateral or financial insurance( we can facilitate insurance to cover collateral gap see page 11 of co. profile), our retainers, cost of response preparation, etc. You can see by this, far less is required by the borrower, than other types of loans or financing where you may have to put up 5-35%.

Please email me at [email protected] or phone me at US CELL WHATS APP 1.224.216.0334 FOR INTAKE OF DEAL FOR FUNDING.