Over 98% of large projects do not receive funding; not because they are too risky or bad projects, but because they lack financial structure. McKinley Investment’s project funding model is able to meet the needs of those projects.
The McKinley Investment's project funding model is geared to provide the needed financing and support for funding projects that range from $20 million to $2+ billion. The funding model satisfies all layers of the capital stack, including the initial seed money, start-up funds, and the bridge, the mezzanine, the equity, and the permanent financing, through the lending model. The lending model is a combination of structured financing, derivatives, and traditional lending. McKinley Investment is the originator of each of its loans. It's not a broker-dealer; it's the note holder for each project that it funds. This gives McKinley Investment the advantage to bring the whole capital stack under one roof.
The McKinley Investment's project funding model requires collateral for the project loan. Collateral can be a combination of real estate, bank instruments, securities, credit enhancements, credit guarantees, corporate and sovereign guarantees, credit-rated bonds, investment portfolios, capital, future sales contracts, off-take agreements, and more.
We are not just a lender; instead, we are more geared as entrepreneurs, so we do everything to ensure the project we fund becomes successful. The McKinley Investment's project funding model is meant to support and partner with the project from the beginning stage and each step of the process until the project is completed. Our team of experts works with the project owner(s) to identify weaknesses in the project's operations. McKinley Investment helps support and partner with each project by strengthening those weaknesses and providing guidance on putting the projects' strengths (both existing and newly created) toward achieving optimal success. Our support services include leadership training, project management, construction management, risk management, marketing support services, system development, business consultation, financial consulting, executive training, and overall development. McKinley Investment is dedicated to supporting the project in every way possible to ensure its success.
UNDERSTANDING OF COLLATERAL
McKinley Investment can provide funding across most industries with the right collateral. The funding amount is not as tricky as is the security (collateral) needed to protect the project's debt. Below is the list of collateral McKinley Investment utilizes to fund 100% of each project.
Types of Collateral
McKinley Investment's collateral is predetermined by the type of needs for the project, the loan itself, the term, and the risk McKinley Investment is taking. Collateral is a security to protect the project funding. McKinley Investment utilizes collateral in different stages of the 100% funding model. Some temporary and some long-term, depending on the capital stack. The commercial property becomes the collateral when you take out a lien on a property (mortgage). When you have a construction project and need a construction loan and the permanent loan, it takes more than just a mortgage. That is what separates McKinley Investment from other project funders. We solve the issues from the beginning stages of the project to the finished set of getting the project funded and completed.
McKinley Investment Accepted Collateral Types:
Letters of Credit
Commercial Real Estate (CRE)
What Is Collateral?
The term collateral refers to McKinley Investment (the lender) 's asset as security for its project finance loans. Collateral may take the form of multiple types of security for each specific project. Since McKinley Investment provides 100% of the project funding (i.e., the whole capital stack), it can utilize many different collateral types to fund the entire project. The collateral acts as a form of protection for McKinley Investment. If the project or borrower defaults on the loan payments, McKinley Investment can seize the collateral and recoup its losses.
Collateral is an item of value used to secure the project financing (the loan).
If a project owner/borrower defaults on the loan, McKinley Investment can seize the collateral and recoup its losses.
Collateral minimizes the risk for McKinley Investment.
Collateral provides validity for the project and its likelihood of success.
How Collateral Works
Before McKinley Investment issues the funding, we need to know that the project can repay the loan and protect McKinley Investment's interest. That is why collateral is necessary and is a form of security to safeguard McKinley Investment's funding. In some cases, collateral can be temporary. For example, there are not any initial assets typically since the construction of the facilities or buildings is not finished during the construction phase, so temporary collateral is used in its place. It ensures that the project (borrower) keeps up with its financial obligation until the project is completed.
As mentioned above, collateral can take many forms. It usually relates to the nature of the project funding loan. For example, a mortgage is collateralized for a commercial property. Institutional credit is used as a form of security from a credit-worthy (credit-rated entity with a credit rating from Moody's, S&P, or Fitch) co-signer or borrower. The collateral for a project finance loan is the pledge of interest into the credit-worthy borrowing group (project receiving the funding) and all of the project's assets.
*Please visit our McKinley Project Funding website.