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Understanding the Iron Bridge Capital Stack

Portland, OR

Iron Bridge recently opened up a new investment option for both accredited and non-accredited investors– Senior Secured Demand Notes.

Senior Notes return an attractive 6.17% effective interest rate with compounding and are redeemable at par with a 30-day notice.

IRON BRIDGE AT A GLANCE:
Years in Business:9
Borrowers:729
Current States Lending In:29
Total Projects: 2,283
Borrower Net Profits:$98,341,497

Three Investment Stacks

Since early 2018, Iron Bridge’s capital structure is comprised of three investment programs, the Junior Notes, Senior Notes, and the Equity Program. Each offers investors different investment options relative to risk, return, and liquidity.

The Senior Notes, introduced during the first quarter of 2018, are the third and newest investment program designed to provide investors the highest level of security and liquidity compared to the Company’s Junior Notes and Equity Program. Senior Notes are currently the only program open to new investors.

 

 

Iron Bridge Senior Notes

The Senior Notes help Iron Bridge lower its blended cost of capital, which allows the Company to offer lower priced loans and attract the highest quality portfolio borrowers. This secures the Notes with the best-of-the-best properties and borrowers, which typically translates to great properties that pay off on time with very low default rates or problems.

Senior Notes have a perpetual maturity and are redeemable at par with a 30-day notice to Iron Bridge, providing investors liquidity while minimizing reinvestment risk and interest rate risk.

In addition, Senior Noteholders can add to their Senior Notes or withdraw from their Senior Notes intra-month, offering investors the ability to earn interest from the day Iron Bridge receives the funds through the day the funds are returned to the investor. It’s a great way for investors to earn an attractive rate of return on capital that might otherwise be sitting in the bank earning nearly nothing.

 

 

Rate of Return

The Senior Notes are senior in security interest to the Company’s existing Junior Notes and Equity Program capital, and subordinate to the Company’s Bank Borrowings or any replacement or addition to such borrowings.

Specifically, Equity Program investors share in the profits of Iron Bridge but are only protected by the value of the real estate collateral securing the Company’s loan portfolio and are first at risk of capital loss should the value of the real estate collateral be insufficient to repay the loan portfolio.

Junior Noteholders earn an 8% interest rate and are protected by the real estate collateral securing the loan portfolio and further protected by over $20 million in Equity Program capital, which would have to be charged off before a Junior Noteholder would lose any of their principal investment.

The Senior Noteholders earn a 6% interest rate and are protected by the real estate collateral, over $20 million in Equity Program capital and further protected by over $28 million in Junior Notes, which would all have to be charged off prior to a Senior Noteholder losing any of their principal investment.

As of December 31, 2017, the pro forma interest coverage, “as-is” loan-to-value and “as-is” asset coverage would have been 7.1 times, 24% and 4.1 times, respectively. See the Company’s most recent quarterly report for more information.

I like to invest in real estate to build and maintain a diversified portfolio. I don’t want to spend my time continually evaluating new real estate investments one-by-one. The Senior Demand Notes solve this problem because I earn interest every day and my investment is spread across a portfolio of over 200 real estate loans located across 29 states.”

David H.

Iron Bridge Investor

Iron Bridge Senior Secure Demand Notes

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Portfolio Properties

US States Operating In

Real Estate Collateral

%

Interest with Compounding

Days Redeemable

Lockup or Waiting Period

DISCLOSURE: The views and opinions shared in this article are those of the author(s), and do not represent the views of Iron Bridge Lending nor are they formal recommendations. Iron Bridge does not provide tax, legal or investment advice, and this article should not be construed as such. Before making any investment, investors should consult with their own attorneys, accountants or other investment advisors.

Our Senior Secured Demand Notes are being offered only by means of the Offering Circular which is available at www.ironbridgelending.com. The Offering Circular is part of an Offering Statement that was filed with, and qualified by, the Securities and Exchange Commission under Tier II of Regulation A under the Securities Act of 1933, as amended (the “Securities Act”). No offer to sell or solicitation of an offer to buy the Senior Secured Demand Notes is being made in any jurisdiction in which such offer, sale or solicitation would not be permitted by law.

The minimum investment in our Senior Secured Demand Notes is $50,000. Persons who are not “accredited investors” as defined for purposes of Regulation D under the Securities Act will not be permitted to purchase Senior Secured Demand Notes in an amount in excess of 10 percent of the greater of the investor’s annual income or net worth (for natural persons) or revenues or net assets (for entities).

This presentation includes “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are generally identifiable by the use of words such as “may,” “should,” “expects,” “plans,” “believes,” “estimates,” “predicts,” and similar words or expressions. Such statements include information concerning our plans, expectations, possible or assumed future financial results, trends and business plans, and involve risks and uncertainties that are difficult to predict and subject to change based on various important factors, many of which are beyond our control. Such factors include, but are not limited to, those discussed in the “Risk Factors” section of the Offering Circular. These and other important factors could cause actual results to differ materially from those described in any forward-looking statement. You should not place undue reliance on our forward-looking statements and information. The forward-looking statements included in this presentation are made as of the date hereof and we assume no obligation and do not intend to update such forward-looking statements or the reasons actual results could differ from those described in such forward-looking statements. All forward-looking statements contained in this presentation are expressly qualified by these cautionary statements. Statements other than statements of historical fact are forward-looking statements.

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