AssetBooster FAQs
What is AssetBooster?
AssetBooster is a term debt solution for clients looking to release equity in unencumbered assets held on their balance sheets. For example, a client has a fleet of unencumbered yellow goods worth $2.5M at auction. They need to clear ATO arrears and fund a new project. From time to time they want to sell assets or acquire new assets as the needs of the business change. Hermes provided a term loan facility of $2M comprising a $1.5M term loan amortising over 36 months, a $0.5M facility for the purchase of “new” equipment and a $0.5M short-term drawdown facility.
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AssetBooster Frequently Asked Questions
What types of assets qualify for AssetBooster?
Equipment with unique identifiers and a liquid secondary market. Real property can also be considered on a first or second mortgage basis.
How is the borrowing base calculated and maintained?
Assets are valued by Hermes’ valuers on an auction basis. An LVR of 50 – 70% is applied depending on the nature of the assets and other credit factors. As the loan reduces in value, the borrowing base becomes available subject to the depreciating values of the assets comprising the borrowing base.
What are the terms and conditions for the initial capital injection?
Usually 36 equal monthly payments comprising principal and interest.
How does the process work for selling items from the fleet and receiving cash releases?
Clients can sell items from their fleet. Sale proceeds are remitted directly to Hermes. Availability under the remaining borrowing base is calculated and funds retained or released accordingly.
What documentation and collateral are required to secure the loan?
The facility is collateralised by GSAs, personal guarantees and charges over the items of collateral making up the borrowing base. Mortgages where required on first or second mortgage basis.
Are there any restrictions on the use of funds from the borrowing base?
Only where part of the limit is reserved for the purchase of “new” equipment as in the example above.
How are short-term drawdowns structured and what are the repayment terms?
Each drawdown is typically structured to amortise fully over three months.
What are the interest rates and fees associated with the Hermes AssetBooster loan?
Hermes is not a bank, and clients seeking these facilities generally don’t qualify for bank facilities – either due to collateral or credit reasons. Our pricing reflects this reality. We are happy to discuss this openly if you have an opportunity you would like to canvass.
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