THE INVESTMENT PROCESS
Lend Collective has established a participation agreement model to operate the Lend Collective platform which accumulates wholesale investor funds for the purpose of lending to qualified commercial real estate borrowers (each a “Borrower”).
A special purpose vehicle is established as the lending entity for each new loan transaction ("Lending Entity") as the counter party to both the investor and the borrower under the respective agreements.
Investors agree to two documents to confirm the funding transaction: (a) a term sheet; and (b) the Investor Participation Terms and Conditions. Under the Participation Terms and Conditions an investor acquires a contractual interest ("Participation Interest") in the rights and benefits under the Loan Agreement with the Borrower. In acquiring a Participation Interest under the Participation Terms and Conditions the investor is entering into a contractual arrangement with the Lending Entity to receive the repayments of interest and principal when those payments are made by the Borrower to the Lending Entity under the Loan Agreement.
The Lending Entity generally requires the Borrower to grant a range of security under the Loan Agreement, including but not limited to:
- mortgage over project real property;
- mortgage over related party’s real property;
- general security agreement over the Borrower’s assets;
- specific security agreement over certain assets held by the Borrower; and
- individual and corporate guarantee and indemnity.
The terms of the Loan Agreements are negotiated by the experienced team of Lend Collective. An investor will have access to the Loan Agreements negotiated with the Borrower and any due diligence materials that the investor requires prior to making an investment.