CAF - Getting Started

Getting Started

Documents Needed to Begin

This letter, on borrowers stationary, formally requests a loan, specifies borrower’s desired terms and conditions, and identifies the guarantee-issuer.

This letter expresses the willingness of the guarantee-issuer to issue and deliver its irrevocable, unconditional guarantee in favor of the Lender as beneficiary.

Specimens of the Letter of Request and Letter of Willingness to Issue Guarantee will be provided upon request.

Within a few days of receipt of these letters, both in original form and by facsimile, CAF transmits a loan offer to the borrower.
The loan offer contains specific terms and conditions.
Borrower accepts the loan offer in writing and returns it to CAF.
CAF then issues to the borrower our Placing Agreement indicating all loan terms and conditions and time needed to make the proceeds available to the borrower.
The Placing Agreement includes the documents to be utilized in the transaction.
The borrower accepts the Placing Agreement in writing and returns it to CAF.

CAF then transmits the names of our bankers to the guarantee-issuer, requiring that the guarantee-issuer confirm to our bankers by SWIFT, their intention to issue the guarantee upon their receipt of the confirmation of the availability of loan funds by the Lender's bank designated for this communication.
CAF transmits documents evidencing the loan to the borrower. These documents are the promissory notes to be issued by the borrower in favor of the Lender's lending bank as beneficiary.
Guarantee-issuer then confirms its intention to issue the guarantee to the Lender's bank by SWIFT.

Upon receipt of this commitment to issue the guarantee, the Lender's bank confirms availability of loan funds to guarantee-issuer by SWIFT.
This confirmation will include the Lender's bank’s commitment to make the loan funds available within the time period stipulated in the Placing Agreement and will specify the Value Date - the date upon which the LIBOR will be assigned to the transaction.
This confirmation will provide for a sufficient amount of time for the borrower and guarantee-issuer to forward the loan documents to the Lender's bank.

CAF notifies the borrower of the scheduled funds disbursement date.
Borrower delivers its wire transfer instructions to CAF for disbursement of loan proceeds into the borrowers account.
Loan proceeds will be released into this account by the guarantee-issuer.
Borrower confirms to CAF that all necessary documents have been executed.
CAF confirms to borrower that all steps in our Underwriting Procedure to this point have been successfully completed.

The Lender's bank disburses the net loan proceeds to the guarantee-issuer by bank wire transfer.
The guarantee-issuer holds these funds for the borrower.
The applicable loan fee is withheld from the loan proceeds before disbursement to the guarantee-issuer.
Guarantee-issuer then issues the actual guarantee and documents evidencing the loan (executed promissory notes) and delivers both by SWIFT and original hardcopy to the Lender's bank no later than 48 hours before the Value Date.
Guarantee and promissory notes must be received by the Lender's bank on this day at the latest.
On the Value Date, the LIBOR is assigned to the loan transaction.
Borrower’s loan interest rate will be this LIBOR + applicable margin.

The Lender's bank then confirms to the guarantee-issuer that it has received the actual guarantee along with the documents evidencing the loan (executed promissory notes) in good order.
The guarantee-issuer releases the net loan proceeds into the bank account of the borrower.
At this point, the loan transaction has been successfully completed.

Prospective borrowers should approach CAF after they have formally applied to the guarantee-issuer and after the guarantee-issuer has approved the application for issuance of the guarantee.

Guarantee-issuing banks often proceed slowly in determining acceptability of collateral and in performing credit analyses to ascertain collateral value.

For competitive reasons, banks will often attempt to dissuade qualified borrowers from obtaining guarantees by offering to make loans with no guarantee required.

CAF loans with guarantees always have an interest rate and terms and conditions that are exceedindly more beneficial to the borrower than Bank loans without guarantees.

If the borrower doesn't know where to go or how to secure a guarantee, CAF is available on a fee basis to assist qualified borrowers in arranging for the issuance of guarantees.

To qualify, borrower must demonstrate to CAF - with complete documentation - that it has presently available financial resources to secure issuance of a guarantee from an accepted guarantee-issuer.

CAF compensation is based upon the nature of work, amount of effort needed, and time required to successfully secure and place guarantee with an accepted guarantee-issuer.

CAF is willing to reimburse borrower for a portion of consulting fee out of CAF’s loan fee when transaction concludes and loan proceeds are released.