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THE BANK GUARANTEE PROBLEM |
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Lenders are not ready to take risk of financing a project without the certainty
of recovering their funds in case of project failure. The Bank Guarantee they
usually request from the Borrowers provides an irrevocable third party guarantee
to the Investor / Lender against any loss.
The issuance of a bank
guarantee, however, has been a major long-standing roadblock for many entrepreneurs
from sub-Saharan African countries and, frequently, good, high profit making projects
are unable to obtain necessary funding. They end-up in limbo.
In
order to solve the bank guarantee problem, Dr. Quenum And Associates and other
Assistance Partner(s) are in the position to arrange for Financial Guarantees
to be issued by reputable guarantor(s) or international insurance companies which
are rated up to "A" by Standard & Poors.
According to experts from
Fox-Pitt, Kelton - Investment Bank - these insurance companies presently having
up to US$ 50 billion in excess capital, a major bear market, combined with
several years of poor result, would be required to eliminate this excess capital;
the problem now is too much capital chasing to little business. For more
on the matter you may search Financial
Times' archive for an interesting article by Andrew Bolger, dated Monday
September 4, 2000
This guarantee will stand an irrevocable undertaking
by the insurance company to guarantee the repayment of principal and / or interest
of a loan or investment.
The Financial
Guarantee is to be used only as a credit enhancement, which would help to
bridge the gap between the Investor, the Lender and the Borrower.
A
sample of the Financial Guarantee is available
as draft preview here
In order for your project to be preliminarily
considered for issuance of a Financial Guarantee, you must fulfill procedures
outlined here together with those (non
negotiable) below described
and send the whole Funding Request / Financial Guarantee Application either as
mail attachments to this email address
or by FAX to Dr. Quenum & Associates: +1 202 478 0432.
Please include in your Executive Summary
a list of the tangible assets the project will own and the precise values in U.S.
Dollars. The Guarantor(s) will want to know what security they will have recourse
to in case of default or loss.
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APPLICATION
PROCEDURES
SEQUENCE OF EVENTS FOR FINANCIAL GUARANTEE |
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Applicant sends executive summary
to BusinessAfrica™ / Dr. Quenum & Associates / Assistance Partner(s) for analysis
and review.
The summary should include:
(a.) Financing required.
(b.) Amount of Guarantee required.
(c.) Use of funds.
(d.) A list
of assets that will be used to secure the guarantors in event of default and the
values of that security in U.S. Dollars and in the English language.
-2. Dr.
Quenum & Associates / Assistance Partner(s) review the executive summary
and send feedback to the Client / Borrower(s) either for additional information
/ input or to confirm that project meets the criteria of the guarantors for issuance
of a Financial Guarantee.
-3.
If the project meets the guarantor's criteria, (assets that when liquidated
on a "quick sale" basis would be sufficient to satisfy any outstanding liability
on behalf of the guarantors) an application is sent to the Client for completion.
-4. Applicant
submits application and sends the full business plan to Dr. Quenum & Associates
/ Assistance Partner(s)
-5.
Should the Client / Borrower(s) indicate their interest in pursuing a Financial
Guarantee for the project, a Letter of Intent is sent to Dr. Quenum & Associates
/ Assistance Partner(s)
-6.
Dr. Quenum & Associates / Assistance Partner(s) acknowledge the Letter of
Intent with a "Pre-Offer Letter" indicating the terms and conditions
under which Dr. Quenum & Associates / Assistance Partner(s) will pursue a
Financial Guarantee assistance / arrangement on behalf of Client / Borrower(s).
The terms and conditions will, also, include the amount of the deposit
- US$ 50,000 for a loan of US$ 5,000,000 ; and US$ 100,000
for loan above precedent amount - that is required to be placed with
Dr. Quenum & Associates / Assistance Partner(s) in order for BusinessAfrica™
/ Dr. Quenum & Associates / Assistance Partner(s) to obtain the commitment
from a major, international, insurance brokerage firm that will act as a liaison
to an insurance company who will ultimately issue the Financial Guarantee.
-7. A meeting
is scheduled between Dr. Quenum & Associates / Assistance Partner(s) and
the Client / Borrower(s) to finalize details.
-8.
Dr. Quenum & Associates / Assistance Partner(s) issue an Offer Letter
(contract) to the Client / Borrower(s) with final terms and conditions of Dr.
Quenum & Associates / Assistance Partners' offer. The Offer Letter becomes
the operative instrument under which Dr. Quenum & Associates / Assistance
Partner(s)) is required to perform. The Offer Letter clearly spells out just what
Dr. Quenum & Associates / Assistance Partner(s) is required to do for the
Client / Borrower(s) in order to earn the deposit that has been placed with Dr.
Quenum & Associates / Assistance Partner(s). The Offer Letter also clearly
states that Dr. Quenum & Associates / Assistance Partner(s) is not
offering loans of any kind, nor is responsible for any funding.
The final responsibility of locating a lender rests with the Client / Borrower(s)
through a Non Disclosure Non Circumvent - NDNC - Agreement
signed between Client / Borrower(s) and Dr. Quenum & Associates
Click here for more.
-9.
The Offer Letter, which is signed between Dr. Quenum & Associates / Assistance
Partner(s) and the Client / Borrower(s), clearly states what must happen
before any funds are released to Dr. Quenum And Associates / Assistance Partner(s),
including the time frame in which Dr. Quenum & Associates / Assistance Partner(s)
is to arrange for the Commitment Letter to be issued. Furthermore, if Dr. Quenum
& Associates / Assistance Partner(s) does not perform, as agreed, the funds
are returned to the Client fully and without deduction.
-10.
The Commitment Letter is issued and sent by FAX to the Client / Borrower(s).
The hard copy of the Letter is mailed to the Client / Borrower(s).
-11.
The Client / Borrower(s) makes arrangements with the lender and undertakes
to fulfill the pre-agreed upon conditions of the Commitment Letter.
-12. Once the
terms and conditions of the Offer Letter have been satisfied, a meeting is
arranged at the offices of the brokerage firm that has issued the Commitment Letter
and an introduction of Client / Borrower(s) to the company ultimately
issuing the Financial Guarantee is made by Dr. Quenum & Associates / Assistance
Partner(s).
-13.
Arrangements are made between the lender and the guarantor for the delivery
of the Financial Guarantee and payment is made for the Guarantee. The deal is
now completed.
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REMARK: We recommend the usage of the "Financial Guarantee" facility
only for project needing large financing amount - in the range of US$ 100,000,000.00
and above - and capable of generating outstanding high return on vested money
- like the BLUE GOLD operation here
exposed - as fees and other commissions charged for first
year is 10% and 5% for consecutive following years.
Click here for another possibility of
Guarantee based on Insurance / Reinsurance combination.
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Completed
"Funding Request"
and attached "Executive Summary"
to be mailed to this email address
or Fax to Dr. Quenum & Associates: +1 202 478 0432
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TOP
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HAVE
A BUSINESS PLAN
FREQUENTLY
ASKED QUESTIONS
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