Saturday, June 25, 2005

Papering a deal

Nothing more fund than drawing up the documents for a deal on a HOT HOT Saturday in June. Here is how it works

We get back a signed term sheet, and we then do the following

We check out the client's invoice debtor - This is the guy that owes our client the money. If we like the look of the debtor, we create the following documents:

  • An invoice discounting agreement
  • Personal Guarantees for all of the company owners to sign. We deal with closely held companies so it is usually 2 or 3 people
  • Officer Certificate - basically stating that the officers of the company acknowledge that they are the officers and have the power to encumber the corporation
  • lien registration acknowledgement - In Ontario, we have something call the PPSA (personal property security act) registration system. Basically in layman terms, this is were you register a lien against a company. We also search the system to make sure the company has no undisclosed liens.

From time to time there are additional documents, but this is the meat of the matter

We kill a few trees in the process!


Blogger Josh Kerbel said...

Forgot to mention:

GSA - General Security Agreement - this basically pledges all of a company's assets to a creditor

4:58 PM  

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