1. Is ICON a Direct Lender?
- YES, ICON Commercial Lending, Inc. (ICON) is a Full-Service Private Direct Commercial Lender, however it also utilizes various capital partners to fund projects. ICON was formed as a Utah corporation in 2006, located in Cottonwood Heights, UT.
- ICON has Unique Resources, Intellectual Property, Proprietary Knowledge and Information plus Key Contacts with Experience in a wide range of areas in Finance, which allow it to successfully structure its project financing. ICON works through its international banking channels to provide ICON’s JV financing.
2. How Does ICON Structure Its Project Financing?
- ICON operates as a venture capitalist, offering a combination of debt with equity financing for both U.S. and select international locations.
- ICON structures every project’s financing facility according to each project’s specific needs with both debt & equity (without exception); generally taking from 40% to 65% equity in every project via a JV Partnership arrangement.
- ICON’s strategy is to partner-up with top-notch business people (as their financial partner) who are actively engaged in developing prime commercial projects but lack suitable financing. ICON prefers partners who think long-term; proven performers who have vision & capacity plus a driving desire to achieve great success. “Building for Humanity’s Sake” is ICON’s mantra.
- ICON provides structured financing up to 100% (Loan to Cost – LTC) for acceptable construction & development projects and sustainable cash-flowing business projects in the U.S. and select international locations through a JV Partnership with the Client.
- ICON works exclusively with proven developers and business operators who have demonstrated superior follow-through in completing past projects as well as consistently representing strong personal character and unwavering ethics.
- Since ICON is not interested in managing any Projects directly, ICON relies heavily upon both the developer’s & builder’s experience, as well as the team of professionals managing of the completed Project. This is all brought together by way of a JV partnership arrangement.
- Client understands the necessity of working together as a Special Purpose Business Entity (SPE) for the completion of Client’s project financing and agrees to enter into a JV Partnership with ICON for this purpose. Therefore, ICON and client will form a new SPE which will work with ICON in completing the Project’s financing and then work together to build-out the entire Project according to the JV Partnership member’s predetermined budget.
- In certain cases, the Project developers may have already organized an SPE solely for their Project. If so, and if this existing SPE contains certain valuable assets related to the Project, which would require fees to be paid to transfer ownership of these assets into a new SPE, then it may be in the overall best interest of the JV Partnership to simply continue on with the existing SPE and allow ICON to join in as an equity partner.
- SPE will purchase or otherwise acquire all of the assets of the Project as well as any and all other leases, contracts, Power of Attorney, and other agreements pertaining to the assets and operations associated with developing of the Project.
- ICON and Client will enjoy the same privileges and ownership rights (in proportion to shares) of all of the assets of Project as well as any and all other leases, contracts, Power of Attorney, and other agreements pertaining to the assets and operations associated with developing Project.
3. What Is ICON’s Funding Criteria?
- ICON provides structured financing for qualified income producing commercial projects and other acceptable humanitarian business purposes, including prime construction / development projects on a case-by-case basis.
- ICON sees dozens of great projects every week, but only works with the very best ones that have the greatest odds for success! ICON carefully reviews many aspects about both the “Project”, and the “JV Partnership” before agreeing to provide Client with an offer to provide project financing.
ICON has 3 primary underwriting considerations:
1. Project: classification type (construction or business), market demand, stabilization time, growth potential, projected equity & long-term profitability, humanitarian benefits.
2.Partner: experience as a developer & business operator, development track record, reputation with industry colleagues, skin-in-the-game, financial ability to participate.
3.Project Management: experience and track record in managing projects of this type & magnitude, ability to provide the most effective – least expensive management solutions.
4. What Are ICON’s Structured Financing Guidelines?
Loan Amount: $10,000,000 to $100,000,000+
Loan Purpose(s): Real Estate Acquisition / Refinance / Construction
Max Loan to Cost (LTC): Up to 100% (TBD)
Loan Term: From 12 to 60 months (TBD)
Draw Period: From 12 to 60 months (TBD)
Draw Period Interest Rate: 6.00% to 7.5% fixed rate (TBD)
Prepayment Penalty: None
Personal Guarantee: None
5. What’s The Process Following Client’s Acceptance of ICON’s LOI – Fee Agreement?
- ICON will speak directly with Client to assist them in understanding the meaning of this LOI – Fee Agreement; including ICON’s underwriting, closing & funding process, timeline for project funding, ICON’s JV Equity Partnership, Escrow Account, and other pertinent matters. Following this review, if Client decides to proceed with ICON as outlined therein, ICON’s due diligence process will begin.
- In support of Client’s original information received by ICON and Client’s acceptance of the LOI / Fee Agreement, Client is requested to provide ICON with the following updated information –
- Detailed Executive Summary, with Marketing Plan & Exit Strategies
- Supporting Spreadsheets / Proforma – Use of Funds Schedule; Revenue & Expenses
- Monthly Operating Construction Budget (Construction Draw Schedule)
- Management’s / Developer’s Background & Experience (resumes)
- Functional & Positional Organizational Charts (with both employees & contractors)
- Current (within 60 days) Corporate and Personal Financial Statements
- Historic Corporate & Personal Financials and Tax Returns for past 3 year
- Feasibility Study / Appraisal / Photos / Renderings / CMA / Surveys / Permits / Licenses
- Articles of Incorporation or Organization, w/ Bylaws or Operating Agreement
- Proof of Funds (Establishing Escrow) – a Bank Statement or Account Tear Sheet from CLIENT’s bank (no older than 3 days) or a letter from CLIENT’s bank where CLIENT’s funds are currently held, signed by two (2) bank officers verifying CLIENT’s funds are sufficient to satisfy ICON’s First Payment escrow requirement stated herein. Bank letter will affirm that CLIENT’s funds are free and clear of all encumbrances and available immediately for CLIENT’s discretionary use.
- Upon CLIENT’s execution and return of this Agreement and ICON’s receipt of Client’s supporting documentation (1 thru 10 above), ICON will provide Client with ICON’s loan transaction documents, including the Joint Venture Agreement, Escrow Agreements, and Funding Agreement for Client’s review and completion.
- Once reviewed & evaluated, ICON will schedule a conference call with CLIENT to review project’s loan underwriting and request any additional information. CLIENT will have the opportunity to discuss their project’s unique dynamics with members of ICON’s Loan Committee in presenting their loan request.
- It is understood and agreed that ICON will provide CLIENT a Loan Commitment / Funding Agreement with the terms described above or with any other terms or structured financing which CLIENT may accept. No Loan Commitment provide by ICON is binding on CLIENT (regardless of the terms) until CLIENT accepts it in writing. ICON will proceed with closing & funding only if CLIENT accepts the Loan Commitment / Funding Agreement.
6. What are ICON’s Up-Front Fees?
- ICON reviews, evaluates, pre-underwrites, and pre-approves all acceptable loan transactions with NO UP-FRONT FEES –
- NO Application Fees
- NO Processing Fees
- NO Underwriting Fees
- If your loan request is approved by ICON’s Loan Committee, you will receive an LOI – Fee Agreement outlining the details of your project’s proposed structured financing facility. The LOI will detail ICON’s proposed loan terms, fees & conditions.
- Due Diligence Fees – Upon Client’s acceptance of ICON’s LOI Fee Agreement, Client agrees to pay ICON’s reasonable & customary expenses for ICON’s comprehensive due-diligence process, which will include a senior management team conducting a site visit for the purpose of meeting principal borrower(s) and their executive team, on-site Project evaluations, general discussions, document execution, and prefunding follow-up.
- Regardless of the number of trips and/or personnel engaged by ICON or the actual expenses for ICON’s purposes, CLIENT’s one-time (non refundable) cost for ICON’s prefunding Due Diligence Fees will be limited to $15,000 for projects within the 50 U.S. States, Puerto Rico and US Virgin Islands, and from $25,000 to $35,000+ for all other International projects depending on location(s), predetermined solely by ICON on a case-by-case basis.
7. How Long Will it Take For My Project to Get Funded?
- Funding will occur approximately 45 to 90 days after the following events have been accomplished:
- Client’s acceptance of both ICON’s JV and Funding Agreement with an “Irrevocable and Firm Commitment to Provide Project Financing”.
8. I have a terrific project, but it’s under ICON’s $10M minimum loan amount . . . is it possible to combine two projects to reach ICON’s $10M minimum?
- Maybe. It depends upon your specific situation. ICON has allowed certain (very experienced) builders to construct multiple projects concurrently, however this scenario would be “the exception and not the rule”. The two project’s proximity is a critical determining factor, as well as the availability of qualified labor sources, local political & economic conditions, etc.
- Also, for many developers, once they see the “vision” of their project’s full potential, they often will quickly see that they have underestimated their financing request perhaps based upon the notion that banks simply won’t lend all the money needed to complete a “superior” product.
- Then, by knowing that ICON only wants to partner up to develop top-notch commercial projects (instead of simply wanting to provide 1st stage mezzanine financing which only allows the project to get off the ground floor, but not completed), developers are able to see ICON’s commitment to never leave a project “half-baked”. We are committed to working to develop projects that become a local “ICON” that best meets everyone’s financial interests.
- Furthermore, many developers only ask for the actual costs associated with the project, but forget to also include the financing costs and interest reserve payments. When these numbers are figured in, it can move the total loan amount above the $10M threshold.
- ICON will work with you to determine how to best develop your project’s financing request with the project’s complete funding in mind. Your ICON Loan Coordinators will assist you in best presenting your project to ICON’s Loan Committee with an amount that will be accepted.
9. Are There Any Places That ICON Will Not Provide Financing?
- ICON will not loan in third-world countries where the government and economy are not stable. Some obvious jurisdictions would be Russia and the Slovak States, various middle eastern counties, most of Africa, Venezuela, Columbia, and other countries not favored by the U.S. government, or those countries who operate unfavorably to nonresident partners/investors.
- While ICON may consider viable projects outside the United States, such as Canada, Austria, Switzerland and certain European Union countries, parts of the Caribbean, and Baja Mexico, currently ICON’s appetite for project financing is primarily for projects that are located in North American. Our view is that there are simply too many quality projects with experienced builders/operators in the U.S. that ICON doesn’t need to travel across the world to work.
- This being said, tell your Loan Coordinator where your project is located (and some of the specifics about the project that set it apart from all the others) and they will let you know if it might be considered by ICON’s Loan Committee. If it’s really a good project that makes a lot of sense, it still might be approved so it doesn’t hurt to ask, but don’t get your hopes up okay?
10. Does ICON Pay Referral Fees to Brokers?
- Yes. Brokers who submit projects to ICON may be compensated up to one percent (1%) of the total loan amount, up to a maximum of $1M commission per project. The amount a broker may receive for referring any one transaction has been adjudicated by law. Therefore, on a case-by-case basis, ICON will will payout a maximum of 1% to the submitting broker, per project, regardless of any other brokers associated with the project. Submitting broker is responsible for compensating all co-brokers.
- ICON will not allow brokers to be paid from both sides. ICON will not allow projects to be financially burdened by having to pay exorbitant broker fees in excess of one percent (1%) of the total loan amount. ICON will likely not approve financing for any project, regardless of its overall merit, with excessive broker fees. ICON’s payment of broker referral fees will be determined solely by ICON on a case-by-case basis.