The team at CPE will work with management to match a detailed capital plan with the company’s financial and operating requirements. The operating plan, in all cases, will be the foundation to determine the appropriate capital structure. CPE does not intend to over leverage companies and will target companies where there is adequate liquidity available to fund operations and growth. In addition, detailed credit analysis will be performed to determine how the company can meet its debt service obligations.

Typical Bridge Loan Structure.
Bridge loans are structured to achieve 20% annualized returns with exit "kickers" to maximize returns. Special features are included to adjust the annual ROI to achieve the 20% return. A minimum of 14% current pay is required and there is a 5% commitment and renewal fee per annum. In addition to demonstrated collateral and cash flow coverage to fulfill current obligations, there may also be a coupon on preferred securities which will vary depending on the risk perceived with each of the transactions.

Contractual Control Mechanisms.
The Fund utilizes several mechanisms and corporate governance requirements to significantly influence the portfolio company, including, but not limited to: (i) acceleration rights; (ii) consent rights; (iii) board representation or observation rights; (iv) financial and other covenants; and (v) establishment of monthly business review meetings. All of these mechanisms will be built into the transaction documents, and will enable the Fund to obtain necessary control or meaningful influence over all significant decisions made by a portfolio company.