Frequent Questions

If you do not find your answer here please feel free to make your question to: questions@irmf.s5.com

Q. Which kind of project may be financed through IRMF Corp. ?

A. We only work with construction projects, usually residential or commercial ones (but we may consider industrial or other construction projects, under certain conditions). We do not provide financing for non-construction projects nor are interested in discussing the issue. Projects suitable for financing must meet the conditions specified in the How We Work section.

Q. Is it possible to finance smaller projects, let's say around 1 million USD ?

A. Usually not, for a number of technical and commercial reasons. The only possibility to do so is when the same Client is in condition to present more than one "smaller" project, reaching a sufficient "global" size of financial needs. In this case we can study a way to present the financing as a package of homogeneous projects and succeed in getting the funds.

Q. Which geographical areas of origin of the projects are interesting for IRMF Corp. ?

A. We only work with emerging countries projects due to the specific interest in these areas of our partners. We are not interested to analyze projects coming from developed countries (which may very well be financed by one of the many local national mortgage companies). We consider emerging countries (or markets) those so classified by the international financial community. Just as an example, emerging countries are : Thailand, Indonesia, Taiwan, Philippines, Malaysia, South Korea, India, Turkey, Slovenia, Hungary, Czech Republic, Poland, Romania, Russia, Morocco, South Africa, Mexico, Venezuela, Brazil, Argentina, Chile etc...

Q. Which kind of costs does the full financing process require ?

A. It depends on each case. Costs may be divided between preliminary costs, commissions and interests. Commissions will be paid on success and varies from 2% to 3% of the amount financed. Preliminary costs depends very much on the single project and Client's situation. It may be necessary in some cases to make an insurance which costs varies from 1% to 1,5% of the financing (depending on the Client's ability to find a good quote). The Client will also have to pay the "Origination Fees" which are necessary to structure and place the loan package into the market for funding, these fees usually amount to 1% of the financing (may reach 1,5% in some cases). Other such expenses may occur depending on the Client's situation ... Finally interests to be paid for the loan are variables and depend on the country where the project is developed and on a number of other issues. As a general parameter we can say that they usually range between 7% and 10% a year. Interests are always paid at the end of each year period.

Q. Which is the guarantee that the financing will be successful ?

A. Unfortunately we can not guarantee, in the first stage, that the financing will go to a good end. Nevertheless we may use our statistics to give you a reliable idea of which are your chances. Every 100 projects we receive around 40 are approved by the mortgage banker for further development. Every 100 projects approved by the mortgage banker around 95 are successfully financed. We have a good sensibility of the projects that have a real chance to be financed and of those that have no chance. For this reason, not to loose our time and work for nothing and let the Client waste his time and money, we use to be quite selective in the first stage of the process.

Q. What can go wrong in the financing process ?

A. This is an hard to predict aspect. If we could imagine what can go wrong we would prevent it. Anyway problems may arise from market turmoils, changed focus of funds/investors in relation with a certain country, hidden information from the Client etc...

Q. Which is the average time of a full financing process ?

A. It is hard to say and depends a lot from how prepared and helpful is the Client in providing us what we need (documents, information ...). Also depends on the market moment and or a number of other issues. We can say, just to give an idea, that the average time for an average project in an average moment is around 2,5 to 3 months.

Q. What does it means when you write that you will "securitize the loan" ?

A. "Securitize" a loan means to convert it into marketable securities for sale to investors. This is a way most financial institutions use to finance their operations. The bond resulting from the securitization process must be collateralized (backed) by mortgages, leases, good quality receivables and other such assets. In our case when we securitize the loan we seek funding for it and we collateralize the resulting securities in two ways, during the first "construction" period we use the collateral guarantees provided by the Client or the performance insurance or a mix of the two, during the second period (once the construction is finished) we use the mortgaged estate itself as collateral.

Q. Why do you need a collateral guarantee or performance insurance ?

A. The securitized loan requires to be backed by suitable assets, in order to be marketable. While we can use the mortgaged estate itself as guarantees, once it is ready, we have no guarantee to offer as collateral for the securitized loan during the period of construction. For this reason we need collateral guarantees and/or a performance insurance during this period, to back the securitized loan and make it acceptable to funds and investors.

Q. When is it necessary to make an insurance ?

A. The performance insurance is needed ONLY when other collateral guarantees are not available and ONLY during the construction period. Other suitable guarantees are real estate, marketable bonds (government or private), marketable stocks, good quality receivables, other marketable assets. The global insurance covering risk to the estate is compulsory and will have to be made once the building is ready in order to protect the guarantee offered as collateral for the securitized loan (which at this stage will be the mortgaged estate itself).

Q. What does the insurance company require to make the insurance ?

A. For performance insurance the insurance company usually requires articles of incorporation, 3 last balance sheets, list of properties and assets, (including those of partners if exists), list of major clients and suppliers, banking references, certificates of regular position for all government obligations. Global estate insurance usually requires just an inspection (for appraisal) of the building.

Q. Do you represent the insurance company in some way ?

A. No, we just have good contacts with a number of insurance companies that we know to be able to mak this kind of insurance. We will negotiate on your behalf and will present you the best proposal we found. If you accept it you will have to sign an inurance contract directly with the insurance company and pay the premium directly to them. We do not receive money on behalf of the insurance company.

Q. What are the "origination fees" ?

A. Origination fees are a common fact in mortgage financing. As far as we know almost any mortgage institution charges them, even if for different reasons. They cover the direct costs of arranging the loan funding. In the case of IRMF Corp. origination fees cover a number of direct costs which range from legal costs to marketing costs for the securitization and consequent funding of the loan. Please see a mortgage glossary or banking terms dictionary for deeper explanation.

Q. How do we send a project ?

A. The best form is to send it by e-mail to projects@irmf.s5.com. You can also send by fax to the number published in our contact page. As soon as we'll receive it we'll confirm to you the receiving and within a week we'll be in condition to say if we can continue with the process or not. Please always send your full details (phone, e-mail, fax etc...) together with the project in order to allow us to maintain contact.

Q. What information a good project is supposed to contain and how is it supposed to be structured ?

A. This is an issue to ask to business project specialists. Anyway, as a general rule, we may say that a project should contain (at least) the following information: a) Description of the market environment in which the project will happen b) Detailed descripton and history of the Client's Company c) Full detailed description of the project, including details of financial needs d) Explanation of commercial and financial viability of the project e) Financial and commercial evolution forecasts (with tables) over the loan period f) Proof of legal viability of project (authorizations or other) g) General company information, clients, suppliers, banks, assets, properties, balance sheets etc... h) Any other information useful to prove that the business is good and will work.

Q. Is there a standard contract to sign to access your services ?

A. Yes, this contract exists and we'll send it to you before to start the process if your project qualifies, in our opinion, for being financed.

Q. Is there any cost for your first analysis and formatting of the project ?

A. No, our first analysis and selection of projects is free of any charge. We are interested in receiving projects to be able to select those we believe worth to continue.

Q. Which are your references ?

A. Due to our confidentiality agreements we can not provide direct references to our Clients. Nevertheless you can check our name in due diligence boards. Our bank relationship for international operations is with ABN-AMRO BANK.

Q. What do you mean when you write that the project must have a sufficient share of units placed ?

A. This is a requirement usually made by mortgage bankers. The aim is to ensure that the project is commercially viable and for this reason will enable the Client to comply with its obligations (payment of interests and principal at the end of the loan period).