The basic methodology behind this program is that your initial funds are positioned as a "loan loss reserve" for your loan. This does not, in any way, place any lien, claim or encumbrance on your funds, it simply shows that there is the appropriate amount of funds "set aside" by the borrower. When the initial funds are positioned in that way, our Bank expands our existing credit lines, which we use to furnish your loan. In order to be meet all compliance requirements for a loan loss reserve, your initial funds must remain un-depleted and unencumbered until your loan is fully repaid.

It is important to note we do not collateralize your loan with the set aside deposit. We simply hypothecate it with our internal funds. Banks collateralize loans, we do not. Hypothecation means the "pledging of an asset without losing control or possession of it".


If your initial funds have been provided by a 3rd party investor/lender who wants those funds returned prior to the repayment of your loan with us, structure your budget in such a manner that you are repaying that deposit from your loan disbursements. Note that the multiple that you will be approved for may not be the same as the multiple that you requested, so that is never a perfect solution. All projects are assessed on a case-by-case basis.


There are multiple methods available to our borrowers that ensure their initial funds remain un-depleted/unencumbered throughout the loan term. All deposit options fully guarantee the safety of the Borrowers capital. We do not collateralize your loan with the set aside deposit To see how your funds are safely protected against all perils, please see the "Financial Management."