Clip Money Inc. Secures $500,000 Loan Through Binding Offer Letter with Business Development Bank of Canada

20 Dec, 2023

Clip Money Inc. Secures $500,000 Loan Through Binding Offer Letter with Business Development Bank of Canada

Clip Money Inc., a company traded on the TSX-V under the symbol CLIP, has made a significant move by finalizing a binding offer letter with the Business Development Bank of Canada (BDC). This arrangement secures a substantial loan amounting to CDN$500,000 (CAD), structured as non-revolving subordinated secured debt, which is earmarked to bolster the company's working capital.

Known for its innovative multi-bank self-service deposit system tailored for businesses, Clip Money stands out for its commitment to transforming how financial transactions are conducted within the corporate landscape. This aligns seamlessly with a core strategy of the Business Development Bank of Canada (BDC), which centers on amplifying support for entrepreneurs. Clip Money's approach involves reimagining the speed, accessibility, and logistical facets of business deposits, offering cost-effective and convenient solutions that resonate well with business owners.

The loan agreement inked with BDC carries an interest rate pegged to the BDC floating base rate plus a 1.00% margin. Presently, the floating base rate stands at 9.30% per annum. To secure this loan, all commitments and obligations under the Offer Letter and BDC Loan will be fortified by a third-lien security interest. This security interest, while subordinate to previous security interests held by the company's existing lenders, encompasses all current and future personal property, excluding the Company's consumer goods. Repayment terms specify the full reimbursement of the principal amount by November 15, 2026, with monthly interest payments due on the 15th of every month. Additionally, the Company has agreed to compensate BDC with a one-time fee of $47,800 (CAD) and an annual management fee of $350 (CAD) in conjunction with this loan.

Furthermore, in relation to the Company's earlier communication regarding a Market Making Services Agreement with ICP Securities Inc. (ICP), it's clarified that ICP will deploy its own funds for market making activities. In return for these services, the Company is committed to a monthly payment of $7,500 (CAD) to ICP. This clarifies the nature of their collaboration in facilitating market making activities.

This strategic move of securing the BDC Loan and clarifying the terms with ICP not only showcases Clip Money's commitment to fortifying its financial standing but also demonstrates its transparency and dedication to fulfilling its agreements in the market.