Borrow Against Your Illiquid Assets
New York Private Finance (NYPF) offers innovative, non-dilutive financing solutions for individuals looking to leverage illiquid assets, such as stakes in private companies, limited partnership interests in funds, and real estate. Our tailored credit facilities are designed to meet the unique needs of entrepreneurs and investors.
Unlock trapped value, limit dilution, maintain control
NYPF provides tailored credit solutions for individuals who wish to unlock the value accrued in their illiquid private ownership interests. Our borrowers include entrepreneurs, investors, independent / fundless private equity sponsors, company operators, real estate developers, or anyone with private assets.
Use of Proceeds
Our clients are wealthy but often hold concentrated positions in illiquid private stock and investment vehicles. They seek to make additional equity investments to stimulate growth, fund diversifying acquisitions or buy out partners. Following are examples of various uses of proceeds for our loans.
Leveraging personal assets to borrow from NYPF enables entrepreneurs to personally contribute more equity to a particular deal which can limit dilution or increase ownership in a transaction.
Independent private equity sponsors who have developed a track record but are not yet ready to raise a committed capital vehicle still need to have liquidity available to invest in new deals. NYPF’s solution can serve as a NAV loan against the independent sponsor’s existing portfolio. Sponsors can use loan proceeds to fund their equity contributions to follow-on investments, bridge to a liquidity event, refinance more expensive sources of capital, or provide the firm or portfolio companies with working capital.
While limited partners in private investment funds may have built substantial value in their investments, they may not have the liquidity on hand to participate in capital calls or make other investments. NYPF’s solution provides access to the liquidity needed to meet capital call obligations or to fund other strategic investments.
When one partner wishes to buyout another, our tailored, non-dilutive loans can facilitate the restructuring of ownership, providing flexibility and control for the remaining partners. This can be very useful for generational changes of control.
Entrepreneurs or investors who wish to finance the general growth strategy of a business may prefer to fund growth with personal capital in order to maintain voting control, limit dilution, or because of the high economic cost of outside equity capital or subordinated debt.
Entrepreneurs or investors in early-stage companies may wish to minimize the onerous dilution that comes with raising venture capital. By utilizing their existing portfolio of investments, they can contribute more cash to minimize dilution, increase their ownership stake, or otherwise self-fund some portion of a new venture’s development.
Investors who expect a liquidity event at some point in the future may have near-term liquidity needs. By borrowing personally, secured by their private, illiquid ownership interests, they can avoid the potentially costly consequences of an early asset sale.
NYPF facilities can be used to refinance or retire older, more expensive loans and obtain more attractive overall financing terms.
Intermediaries
NYPF works closely with financial intermediaries who provide advisory services, both capital raising and merger & acquisition advice, to entrepreneurs in the middle market.
By enabling clients to borrow against their illiquid private stock and other private assets, NYPF’s credit facilities offer an alternative to traditional capital sources and allow entrepreneurs to avoid dilution and maintain control.
Summary of Indicative Terms
While many of the terms of our loans are tailored to the specific needs of the individual and the transaction, a summary of Indicative Terms is highlighted below.
Borrower(s)
Individual(s), or special purpose vehicle (incl. holding company), w/ a guarantee from the individual(s)
Amount
$5 – 30 million
Maturity
3 to 6 years
Collateral
Illiquid assets such as direct interests in private companies, limited partnership interests in private equity or venture capital funds, real estate, art, jewelry, and other illiquid private assets.
Rate
In addition to charging a current coupon, a portion of the interest cost of each loan takes the form of a “participating interest” in the investing activity of the borrower. This allows us to keep the current coupon lower and it aligns the borrower’s interests with ours, encouraging us to work with the borrower through any situation that may develop.
Structure
Our facilities are made to individuals or SPV’s with full personal guarantees, secured by pledges of collateral, and are not obligations of the operating vehicles into which the client invests. We structure our loans to co-exist with other credit facilities from different lenders.
