International Finance Bank LTD

Credit Lines and Lending Philosophy 

 

IFB Bank is a specialised investment bank committed to delivering bespoke financial services to a discerning international clientele. Our core focus lies in the structuring of sophisticated investment vehicles, capital market transactions, strategic advisory mandates, and private placement arrangements. 

 

In keeping with our institutional identity and strategic orientation, we do not generally operate as a conventional retail or commercial lender. Traditional loan products fall outside the scope of our primary activities. Consequently, we do not offer standardised credit facilities to the general public or to entities without a substantial and proven track record within our banking ecosystem. 

 

However, in exceptional circumstances—and subject to stringent internal due diligence—we may extend tailored financing solutions to a select segment of our clientele. These are typically high-net-worth individuals (HNWI), family offices, sovereign-linked entities, and analogue corporate structures with whom IFB Bank maintains a long-standing and exemplary relationship. 

 

Any consideration of lending is always embedded in a broader strategic context and is designed to complement the client’s existing financial architecture. Credit Lines, when offered, are customised to reflect the complexity of the underlying asset structures, the client’s demonstrated financial conduct, and the alignment of interests over the long term. 

 

Clients who meet these criteria and wish to explore bespoke credit solutions are encouraged to initiate a private consultation with their assigned relationship director. Each request is reviewed individually by our internal risk and investment committees, ensuring that any facility granted adheres to the highest standards of prudence, discretion, and institutional integrity. 

Initial Questionnaire for Companies Applying for a Loan

A. Company Identity and Legal Status Verification

  1. Full Registered Company Name:
  2. Trade Name(s) (if different):
  3. Date of Incorporation/Registration (DD/MM/YYYY):
  4. Place of Incorporation/Registration:
  5. Type of Legal Entity (e.g., LLC, Ltd., PLC, Corporation):
  6. Company Registration Number (provide certified incorporation documents):
  7. Registered Office Address (verified via official documentation):
  8. Principal Place of Business (if different from Registered Office):
  9. Tax Identification Number or Equivalent:
  10. VAT Registration Number (if applicable):
  11. Official Company Contact Details (Telephone, Email, Website):


B. Ownership and Management Structure

  1. Detailed Shareholder Information:
    • Full Names of all Shareholders (attach official IDs):
    • Percentage Ownership by Each Shareholder:
    • Ultimate Beneficial Owner(s) (attach documentation verifying UBO):
  2. Board of Directors Information:
    • Full Names (attach official IDs and CVs):
    • Positions Held within the Company:
  3. Management Team:
    • Full Names and Positions (attach CVs and references):


C. Financial Information and Performance Verification

  1. Audited Financial Statements (Balance Sheets, Income Statements, Cash Flow Statements) for last 3 Years (better 5 Years).
  2. Latest Interim Financial Statements (if applicable).
  3. Bank Statements for the Past 12 Months:
  4. Current Company Credit Reports from Relevant Credit Bureaus:
  5. Tax Compliance:
    • Submit Corporate Tax Returns for the Last 3 Years:
    • Provide Documentation Proving No Outstanding Tax Liabilities:
  6. Detailed Annual Financials:  

    - Last 5 years' audited financial statements.  

    - Breakdown of revenue, costs, profits, and margins.  

 7.   Key Financial Ratios (calculated for the last 3 years):  

    - Debt-to-Equity Ratio:  
    - Current Ratio:  
    - Interest Coverage Ratio:  
    - EBITDA Margin:  
    - Asset Turnover Ratio:  
 8. Cash Flow Statements:  
    - Actuals (last 3 years).  
    - Projections (next 3–5 years).  

D. Asset and Liability Declaration

  1. Detailed Asset Listing:
    • Real Estate Holdings (attach valuations, title deeds):
    • Machinery and Equipment (attach valuation and ownership proof):
    • Movable Assets (e.g., vehicles, inventory).
    • Receivables and Cash Flow Assignments.
    • Financial Assets (e.g., shares, bonds, mutual funds, bank balances):
    • Intellectual Property (patents, trademarks, copyrights—attach registrations):
  2. Detailed Liability Listing:
    • Existing Loans and Credit Facilities (attach agreements, terms, and repayment schedules):
    • Outstanding Obligations to Suppliers (attach relevant statements):
    • Tax Obligations (attach assessments and payment schedules):
  3. Independent Valuation Reports (mandatory for all collateral):
  4. Third-Party Guarantees (if any):
    • Name and rating of guarantor.
    • Legal agreements supporting guarantees.


E. Business Operation and Revenue Verification

  1. Nature and Detailed Description of Core Business Activities:
  2. Number of Employees:
  3. Main Markets Served (Domestic/International):
  4. Key Customers (provide top five clients and percentage revenue contribution):
  5. Key Suppliers (provide top five suppliers and percentage procurement share):
  6. Monthly Revenue (attach revenue reports/statements for the past 12 months):
  7. Revenue Diversification (provide percentages by market segments):


F. Financing-Specific Questions

  1. Exact Amount of Financing Requested:
  2. Explicit Purpose of the Financing:
    • ☐ Working Capital (provide cash-flow projections):
    • ☐ Equipment or Asset Acquisition (attach proforma invoices and contracts):
    • ☐ Expansion/Project Financing (submit detailed project proposal and feasibility study):
    • ☐ Debt Refinancing (provide details of existing debts to be refinanced):
    • ☐ Other (specify clearly and attach supporting documentation):
  3. Proposed Financing Term and Preferred Repayment Schedule:
  4. Desired Loan Tenor (specify duration in months/years): 


G. Risk and Debt Servicing Capacity

  1. Monthly Debt Servicing Capacity (attach supporting cash-flow forecasts):
  2. Current Debt-to-Equity Ratio (provide calculation and documentation):
  3. Historical Record of Debt Repayment (attach evidence of past repayments):
  4. Stability and Predictability of Revenue Sources:
  5. Projected Financial Growth and Justifications (based on market studies and business strategy):
  6. Key Operational Risks (explain and provide mitigation strategies)
  7. Industry Risks (document external risks affecting the business):
  8. Contingency Plans (provide evidence of crisis response planning).
  9. Existing Insurance Coverage (attach copies of policies).

 


H. Mandatory Documentation Requirements

  • Certified Company Registration and Incorporation Documents.
  • Valid IDs of Directors, Shareholders, and Ultimate Beneficial Owners.
  • Proof of Registered Address (utility bills, lease agreements).
  • Audited Financial Statements (last 3 years).
  • Recent Interim Financial Statements.
  • Bank Statements (last 12 months).
  • Corporate Tax Returns (last 3 years).
  • Comprehensive Asset and Liability Documentation.
  • Business Plans and Financial Projections (for expansions or projects).
  • Relevant Market Studies or Industry Reports (supporting revenue forecasts).
Business Loans

Investment and Financing Structure

I. Credit Tranching

1. Structured Risk Waterfall

Definition: A multi-layered capital stack dividing risk into tranches—senior debt, mezzanine, and equity—with each level having its own risk-return profile. 

Mechanics: Funds flow into an SPV. The repayment follows a strict waterfall: senior capital is repaid first (with interest), followed by mezzanine, and finally residual profits go to equity. Mezzanine and equity may include IRR hurdles, preferred returns, and profit-sharing (“carry”). 

Use Case: Pre-IPO share financing, real estate projects, infrastructure deals, private equity structures. 

Pros: Prioritised repayment, well-calibrated risk allocation, allows for complex return engineering. 

Cons: High legal complexity, illiquid, high cost of structuring. 

 

II. Synthetic & Derivative Structures 

2. Total Return Swap (TRS) 
 
Definition: Synthetic contract delivering the full economic performance of an asset without transferring ownership. 
 
Mechanics: Investor pays a fee to a counterparty (e.g. bank), which holds the underlying asset and remits price appreciation + yield to investor. Margin collateral required. 
 
Use Case: Exposure to restricted shares or assets not available for outright purchase. 
 
Pros: No equity transfer; balance sheet light. 
Cons: Counterparty risk, regulatory oversight, margin requirements. 

3. Contract for Difference (CFD)


Definition: Derivative mirroring the price movement of an asset without actual ownership. 

Mechanics: Investor and issuer settle the difference between the current and future price in cash. No asset changes hands. 

Use Case: Short-term directional bets, highly leveraged exposure. 

Pros: Leverage; low capital outlay. 
Cons: Regulatory restrictions; extreme volatility. 

4. Forward Purchase Agreement (FPA) 

 
Definition: A binding contract to buy/sell an asset at a fixed price and future date. 
 
Mechanics: Investor commits now to buy at a future date. Settlement is triggered by liquidity event (e.g. IPO), with agreed pricing logic. 
 
Use Case: Deferred exposure to pre-IPO shares. 
 
Pros: Timing flexibility; strategic positioning. 
Cons: No interim upside; execution risk. 

III. Hybrid Debt–Equity Instruments 

5. Convertible Note 

 

Definition: Debt security that converts into equity upon a predefined event (e.g. next round, IPO). 

 

Mechanics: Loan accrues interest. Converts at discount or valuation cap once trigger is met. Often includes maturity date and optionality. 

 

Use Case: Bridge financing in venture capital and growth equity. 

 

Pros: Flexibility, aligns investor and issuer incentives. 

Cons: Dilutive, conversion mechanics can be contentious. 

6. Participating Loan 

 

Definition: Loan with fixed interest plus a share of the borrower’s profits or equity appreciation. 

 

Mechanics: Interest is paid regularly. In addition, lender receives performance-based payment—either as a percentage of profits, or gain on exit. 

 

Use Case: Sub-institutional growth capital. 

 

Pros: Dual income; retains lender alignment. 

Cons: Profit-sharing calculation disputes; hybrid complexity. 

7. Contingent Value Rights (CVRs) 

 

Definition: Rights entitling holder to receive additional payment if a defined event occurs (e.g. valuation threshold, FDA approval). 

 

Mechanics: Often attached to M&A deals or investment rounds. Rights become exercisable only upon milestone achievement. 

 

Use Case: Risk-buffer in uncertain outcomes. 

 

Pros: Built-in optionality; risk deferral. 

Cons: Illiquidity; often binary outcomes. 

IV. Equity-Linked Securities 

8. Preferred Equity 

 

Definition: Shares with preferential dividend and liquidation rights over common equity. 

 

Mechanics: Receives fixed dividend; may convert into common shares or be non-convertible. Typically non-voting but senior in payout. 

 

Use Case: Later-stage funding rounds or bridge equity. 

 

Pros: Downside protection; priority in liquidity event. 

Cons: Limited governance; capped upside. 

9. Redeemable Equity 

 

Definition: Equity that can be bought back by the issuer at a pre-defined price or under defined terms. 

 

Mechanics: Issuer retains right (or obligation) to repurchase shares after lock-up or trigger event. 

 

Use Case: Temporary equity exposure with fixed exit. 

 

Pros: Defined exit path; often tax-favourable. 

Cons: May lack market value before redemption. 

 

10. Equity Collar 

 

Definition: Structured position combining long equity, a protective put, and a short call to hedge downside while capping upside. 

 

Mechanics: Investor buys the asset, buys a put below market, and sells a call above it—creating a “collar” of returns. 

 

Use Case: Hedging pre-IPO or concentrated equity exposure. 

 

Pros: Downside protection; cash-neutral overlay. 

Cons: Caps upside; premium costs. 

V. Revenue- or Performance-Linked Agreements 

11. Revenue Participation Agreement (RPA) 

 

Definition: Investor receives a fixed share of company revenues until a return target is met. 

 

Mechanics: Agreement stipulates revenue sharing (% gross or net) until IRR or multiple achieved, then extinguishes. 

 

Use Case: Companies with strong cash flows but reluctant to sell equity. 

 

Pros: Non-dilutive; aligned with cash generation. 

Cons: No equity appreciation; difficult to scale. 

12. Milestone-Based Profit Sharing 

 

Definition: Investor only receives returns if certain non-financial KPIs or metrics are met. 

 

Mechanics: Return tranches are activated sequentially when milestones (e.g. launch, user base) are met. 

 

Use Case: Performance-dependent early-stage investments. 

 

Pros: Efficient risk capital; incentivises operational targets. 

Cons: Binary outcome risk; hard to enforce. 

VI. Custodial or Collateral Structures 

13. Securities Lending with Option Overlay 

 

Definition: Investor lends shares to third party and retains an option (call or synthetic) for price appreciation. 

 

Mechanics: Shares placed with borrower; investor receives lending fee and holds financial instrument linked to future upside. 

 

Use Case: Tax optimisation or hedging. 

 

Pros: Monetisation without sale; keeps optionality. 

Cons: Counterparty risk; structurally intricate. 

14. NAV-Based Lending 

 

Definition: Loan facility backed by private portfolio NAV. 

 

Mechanics: NAV periodically assessed. Lender provides line of credit with margin triggers and covenants. 

 

Use Case: Family offices and funds needing liquidity from illiquid holdings. 

 

Pros: Asset-backed credit; retained upside. 

Cons: NAV volatility; high monitoring burden. 

15. Repo Agreement (Repurchase) 

 

Definition: Temporary sale of an asset with an obligation to repurchase it later at a defined price. 

 

Mechanics: Asset sold with repurchase clause, effectively acting as secured lending. 

 

Use Case: Short-term liquidity and treasury management. 

 

Pros: Capital-efficient; short duration. 

Cons: Time-bound; potential price risk on re-entry. 

VII. Fund or Pool-Based Structures 

16. Collateralised Fund Obligation (CFO) 

 

Definition: Tranche-based securitisation of fund income or asset pool. 

 

Mechanics: Senior, mezzanine, and equity notes issued against expected future distributions or asset value. 

 

Use Case: Liquidity for fund-of-funds or PE portfolios. 

 

Pros: Structured liquidity; credit enhancement via tranching. 

Cons: Complex structuring; limited secondary market. 

17. SPV Syndication 

 

Definition: Multiple investors pool capital via SPV to acquire or fund a specific target asset. 

 

Mechanics: SPV holds the asset; waterfall and governance arranged contractually. 

 

Use Case: Collaborative acquisition of large private placements. 

 

Pros: Shared risk; concentrated control. 

Cons: Governance burdens; illiquidity. 

VIII. Structured Public–Private Hybrids 

18. PIPE (Private Investment in Public Equity) 

 

Definition: Private investor purchases public shares directly from issuer, usually at discount and with lock-up. 

 

Mechanics: Negotiated terms; often includes warrants or preferred shares. 

 

Use Case: Fast capital for distressed or high-growth public issuers. 

 

Pros: Deep discount; rapid execution. 

Cons: Regulatory scrutiny; dilution. 

19. Special Warrants / Option Pools 

 

Definition: Warrants issued to private investors with long duration, often tied to future events (e.g. IPO). 

 

Mechanics: Warrants convert into equity if specified condition is met. 

 

Use Case: Delayed entry into equity while preserving optionality. 

 

Pros: Leverage; low cost of entry. 

Cons: Value erodes over time; complex triggers. 

20. Trust-Backed Structured Note 

 

Definition: Investor purchases a note backed by a trust holding illiquid or high-yielding assets. 

 

Mechanics: Trust administers asset pool; notes pay fixed or variable return tied to underlying NAV or performance. 

 

Use Case: Private wealth structures, cross-border optimisation. 

 

Pros: Tax-efficient; customisable. 

Cons: Legal complexity; long duration; trust fees. 

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