Welcome to Conister's guide on Block Discounting

The percentage will depend on dilution (Arrears, Defaults and Write-Offs) and concentration (maximum individual exposures), typically 70-95%.

Conister Bank will also expect to take a floating charge over the Borrower’s assets. On each drawdown underlying assets will be secured and assigned to Conister Bank through a deed of assignment.

The key feature of this product is that the Borrower will make capital and interest repayments during the term of the loan (maximum 7 years).

Conister Bank will expect a cover ratio of between 105%-215% of the gross receivables divided by the Purchase Price/Advance Rate.

If the underlying agreements that are assigned by the Borrower go into arrears/default, then this can be replaced by further loans (unencumbered assets) which will be assigned to Conister Bank. Therefore, allowing the Borrower to always meet the agreed cover ratio of 105%-215%.

The Borrower will be requested to provide relevant paperwork e.g., AML/CDD identification and proof of address to Conister, to satisfy any conditions precedent and reach legal completion.

A pre-lend audit will be undertaken during the onboarding process which entails a review of the Borrower’s polices, processes and procedures. Quarterly audits will be conducted through both remote and site visits. This will look at all aspects of the Borrower but focus on a review of underlying agreements, customer journey, regulatory/legislative compliance and financial performance.

Conister Bank will use monthly management information and loan book data to review and monitor the financial and non-financial performance of the Borrower. Open Banking permissions can be provided by the Borrower as an alternative to providing bank statements monthly. Read-only access to the Borrower’s lending system can improve auditing, monitoring, and sample testing, and attract more favourable terms.

Financial covenants, typically just tangible net worth, will be agreed at the outset of the Block Discounting Facility (based on historic and forecast performance), Conister Bank will measure variance to and compliance with these covenants throughout the life of the Facility.

Conister Bank will agree credit criteria and Non-Financial Covenants during negotiations, these will be confirmed post Conister Bank’s sight of and satisfaction with the pre-lend audit.

Conister Bank will require legal opinion or confirmation that the Borrower’s legal documentation, underlying documentation controls and timelines for issuance are regulatory/legislatively compliant, transferable (assignable) and enforceable.

Pre-lend audit fees and legal fees will be payable by the Borrower. An arrangement fee of 1% of the facility will be payable on the signing of the agreement. Depending on the position in the products and the company’s lifecycle, financial and non-financial performance, costs, and expenses are negotiable. All other fees will be incorporated within the Block Discounting Facility and discussed between parties during the on-boarding process.