Commercial Financing

For many years, the principal of American Medical Capital has arranged below market rate financing for builders and developers.   Our key index for financing is floating, 30-day Libor.  Historically, 30-day Libor does not fluctuate significantly and is usually the lowest market index rate. 

We are a premiere source of funding for both commercial real estate financing and refinancing.  However, we can provide financing for any purpose when the loan is backed by a Direct-Pay Letter of Credit (DPLC).  Our lending begins with deals that are at least $25 million dollars, and only limited to an institutions ability to issue a maximum size letter of credit.  We typically close our loans within 2 to 4 weeks.

Why use a Direct-Pay Letter of Credit?

The purpose of a Direct-Pay Letter of Credit is to reduce the aggregate cost of financing.  An interest-only loan at 30-day Libor is ideal for most any borrower.  Depending on your bank, a DPLC can generally be obtained for a nominal fee.  We can also pay this fee for you at the time of closing from the proceeds.  In today’s market, banks have significantly less cash yet we still have billions of dollars to lend at low rates utilizing money market funds, analogous to the municipal bond process.  Many lenders today are asking borrowers to move their deposits in order to obtain their loan; yet your bank does not want to see you pull your deposits.  We help by keeping your banking relationship intact while the bank receives fee income from the DPLC.  Hence, a win-win-win.

How to apply for financing:

  1. After consulting with one of our lenders, a business desiring to borrow from us first obtains a DPLC from a U.S. bank—or the U.S. office of an international bank.  As an exception, a foreign bank can be used as long as a U.S. bank (or U.S office of an international bank) serves as the confirming bank.  We will work with the bank to arrange funding the proceeds directly to your account.

  2. We begin the 2 – 4 week syndication process once we receive a Letter of Intent from your bank to issue the Direct-Pay Letter of Credit, the beneficiary will be a trustee bank.  Since the DPLC is the collateral, no other documentation such as financials or personal principal information is required.  The DPLC will not be drawn upon unless there is a default.  Your bank reserves the right to increase, decrease or amortize the DPLC each year.

  3. We arrange to finance 100% of the value of the DPLC, less some one-time fees deducted from the loan at closing.

What are all of the fees?

  1. First, the interest only, 30-day Libor fee with a floor of 1.00%.  This is paid monthly.  In the 4th quarter of 2008, the rate was below 0.50%—much less than prime.  No points are added but there are some one-time fees that follow in steps two and three.

  2. A one-time Syndication and Trustee fee (deducted from the loan proceeds).

  3. A one-time origination fee, depending on the size of the loan, but also deducted from the proceeds of the loan.

  4. Annual renewal fee, quoted depending on the size and term of the loan.

  5. There are no upfront fees nor any prepayment fees.