The Key to a Successful Private Placement Program – Place funds into a bank where a trader has a strong relationship
To introduce our group, we work with principals and other official representatives to help our clients engage in aprivate placement program / transaction. To ensure that we have a successful transaction, we must first of all understand some of the things that can go wrong in a private transaction of this nature. I will share some thoughts with you in this document in a hope that you and your investors can understand the reasoning and benefits in moving of funds to the transacting bank into a sole signatory account in the name of the client. From our experience, and from those of successful individuals that we work with, more then 50% of transactions fall apart and fail after contract stage when the clients bank refuse to issue / confirm the blocking of funds to trigger the commencement of the transaction. This leaves a nasty feeling fiat currency in the eyes of the investor and the people around him, all of whom are wondering if the transaction was real or a scam. Often people talk about doing a bank to bank block or administrative hold at the clients bank to start a transaction. This is plausible, but I ask the question, for a first time investor, what response do you think that the client is going to get when he tells his bank officer that he needs his funds blocked for a PPP? The final step was for the client to request from his bank, some from of ‘blocked funds’ confirmation. This could be one of several types that had been mutually agreed between the client, trade group and their ‘line of credit’ providers. We sometimes tend to forget that the client?s local bank does not understand the nature of this transaction and probably told him that the whole thing was impossible.
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