Investing in Private Debt

Attractive investment returns are possible through private lending, but preparation, proper loan structuring and ongoing monitoring are essential to protecting your invested capital.  This White Paper offers a three-step process:

1) Get to know the Issuer’s management well and conduct a thorough credit analysis and due diligence review of the Issuer;

2) Structure the investment, as defined in the investment’s Summary Terms and Conditions or (Term Sheet,) by seeking as senior a position in the Issuer’s capital structure (or Capital Stack) as possible and by securing liens on the Issuer’s collateral using Uniform Commercial Code filings to limit your exposure in the event of a default; and

3) Conduct ongoing monitoring of the Issuer’s business performance and its compliance with loan covenants, such as loan-to-value and fixed-charge coverage ratios.

Carofin stays engaged with each investment it offers to help ensure plans are in place to protect participating investors.





In the interest of accessibility, here are some terms that any investor should be familiary with.