The Insurance Wrap
The Insurance Wrap is a national business finance company with more than $2.5 billion in assets. It provides financing to its clients across more than 30 industries on projects ranging from $500,000 to $100 Million. The Insurance Wrap maintains leadership positions in small business, middle markets, enterprise lending, technology factoring and much more.
USA | Canada | Central & South America | Asia | UK
NEW YORK CITY, NEW YORK USA
VANCOUVER, BRITISH COLUMBIA CANADA
RIO DE JANERIO, BRAZIL SOUTH AMERICA
HONG KONG, PEOPLE'S REPUBLIC OF CHINA
LONDON, ENGLAND UNITED KINGDOM
MEXICO CITY, DISTRICT FEDERAL MEXICO
BOGOTA, DISTRITO CAPITAL COLOMBIA
NEW DEHLI, INDIA
DUBAI, UNITED ARAB EMIRATES
Typical Questions about our process
Q: Is this REAL? How can you do this so quickly and without all the collateral that a bank needs?
Tuscon Arizona, USA
A: The insurance wrap model takes an initial investment from “The Borrower” and leverages the amount at a ten to one ratio. The initial investment amount is guaranteed by a secured interest in the amount of the initial investment in a credit instrument held by the Private Equity (PE) firm’s bank and is provided to insure the Borrower’s initial investment is safe until the PE firm performs. Should the PE firm not perform within the specified time frame in the contract, usually 90 days, the Borrower’s investment is returned with 35% interest.
Q: What are the ‘Steps’ involved to make this happen?
Tacoma, Washington USA
A: The insurance wrap process is completed in “two steps” and on the add occasion “three steps” depending on the size of the deal. With each “step”, the PE firm leverages the initial investment by purchasing a long term asset, packaging it and selling the discounted cash flows of the asset. At each step the PE purchases a “circuit breaker” or insurance policy to guarantee the proceeds to the investor who ultimately monetizes the asset that the PE firm purchases, known as an “Insurance Wrap”.
Q: How is the Private Equity firm protected?
Montreal, Quebec Canada
A: At each step the Private Equity(PE) firm purchases a “circuit breaker” or insurance policy to guarantee the proceeds to the investor who ultimately monetizes the asset that the PE firm purchases, known as an “Insurance Wrap”. The PE firm purchases a long term asset often using their own assets as collateral. They then “Wrap” the asset and sell the discounted cash flows which are guaranteed to the purchaser by an insurance policy for the contracted amount.
Q: So let’s say I decide to do an Insurance Wrap, how much does this cost me?
New York, New York USA
A: The borrower (in this case you) places 10% of the expected proceeds of the contracted amount into the Private Equity firm’s bank. The borrower is provided a security interest in a credit instrument for the amount at the time of the initial payment. The money is secured and guaranteed to be returned within the agreed specific terms of the contract.
Q: What happens to the funds and are they Insured?
San Francisco, California York USA
A: The original principal is used by the Private Equity (PE) firm to purchase a group or “package” of viatical insurance policies in the amount the present value of the policies of approximately 9 times the amount of the initial investment. The PE firm purchases them at their present value and then pays the assumed expenses which average approximately 46.5% of the maturity value, leaving a gross proceeds balance of approximately 53.5%. In the next step the PE firm purchases an insurance policy (Wrap) to insure the net value of the discounted cash flows of the viatical package. The cost of the Wrap is approximately 10% of the net value of the package. The PE firm then takes a guaranteed investment to one of their client investors who provides a loan, generally at approximately 70% loan to value ratio, to turn the asset into cash.
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ABOUT THE INSURANCE WRAP
We are simply put, the best alternative way to finance companies globally. We have created a method of financing that eliminates the headache of approaching multiple funds; the agony of feeling like your company’s ownership has been taken over by a dictatorship and mitigates the risk of investing for investors by protecting them under a shield.