The process is designed to promptly advise if a transaction can be done or not in the quickest time possible to not waste the time or costs of the borrower nor Oncidium Capital.
Generally, following review, this answer is given as a YES or NO within a day of the decision.
The following efficient process is implemented with turnaround times being dependent on the borrower’s turnaround times providing the required information requested and the quality thereof outlined in the loan agreement. Historically, from beginning to finalization the process can take 15 days up to 12 months.
1. The transaction is presented and reviewed.
2. Should Oncidium Capital have interest, a conference call with the potential borrower and/or their team is set up.
3. Following satisfactory answers to queries preliminary terms are issued.
4. The preliminary terms are sent in an email that outlines the basic terms of the transaction.
The preliminary terms include in detail:
4.1 the capital amount that can be allocated to the transaction plus the contingency
4.2 the interest rate
4.3 the deferred payment term suitable
4.4 the client’s portion of the underwriting fees payable
These are refundable if the formal terms are not in line with the preliminary terms and initial discussions.
4.5 Oncidium Capital’s portion of the underwriting fees allocated to the transaction
4.6 Confirmation that the portfolio can cover due diligence and legal costs and, seldom if not, due to
inherent transactional risk, what percentage.
5. Once the preliminary terms are accepted by the client, the parties engage formally by concluding
Oncidium Capital’s standard MOA. The MOA governs the initial phase of the process and relationship.
6. A formal term sheet is issued for the borrower’s acceptance within 2-4 days of the MOA being concluded and
the client meeting the requirements set out therein.
7. The loan agreement is drafted. The drafting process is expedited as it is only sector, transaction and
geographic location-specific additions that are inserted to the specific portfolio’s template. This template has
been finalized and settled at the outset during the initial structuring phase of the portfolio and approved
by Oncidium Capital, the compliance department, the capital partners, and the underwriters.
8. The loan agreement draft is sent to the borrower for their and their legal counsels’ opinion and
negotiated accordingly with the goal of finalizing the transaction
9. The borrower submits the required information outlined in the loan agreement via the project manager allocated
to the transaction.
10. These requirements are reviewed, and comments are sent. Managing Director, Evan Török always advises,
”If you do not have the requested info on hand, you should not be in business.”
11. Once Oncidium Capital’s legal team are satisfied that all conditions have been met compliance
department reviews that all information is in order and signs off on the transaction.
12. Normal banking procedures apply and are put in place for the first drawdown.
13. A full AML list of documents is sent to the receiving bank that includes the source of funds etc. this is done so
that there is no position where the first drawdown is paid and funds are frozen by the Borrowers recipient bank
to do relevant AML checks as this delays the process considerably. Oncidium Capital only instructs AAA
rated institutions globally that are fiscally stable, reputable and located in tax havens or jurisdictions with low
tax rates and high on the World bank’s Ease Of Doing Business annual survey.
14. The First drawdown is then paid out.
The Borrower and Oncidium Capital’s interests are aligned as Oncidium Capital is only able to recover funds expended on the transaction on the first draw-down and over the term of the facility.
KINDLY NOTE: the transaction cannot be concluded if the borrower does not provide all the information requested, accepted by Oncidium Capital acting in a commercially reasonable manner and in good faith. The Oncidium Capital team are only as efficient at performing its function if the borrower works WITH Oncidium Capital's team.