It's set. It’s hiked. It’s up. It’s gooooooddddd.
Okay, yeah, you knew we were gonna start there.
In FinanceLand, an equity kicker is usually a deal sweetener for debt. So…Shmoopicon Valley Bank loans whatever.com 5 million bucks at 8 percent interest.
But with a catch.
The bank doesn’t feel that 8 percent is enough to cover the risk and other crap that whatever.com brings with it. They ain’t Google. So in addition to the 8 percent interest, Shmoopicon Valley Bank wants an equity kicker in the form of 3 percent warrant coverage.
That is, they want 3 percent of the value of the loan of 5 million...or 150,000 shares of whatever.com thrown in as part of the deal. Those 150,000 shares are equity, and they kick the debt deal to be worth a lot more, should things go well at whatever.com.
But, um, we’re not hopeful.
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Finance: What is Equity Kicker?8 Views
Finance allah shmoop what is an equity kicker It's that
it's hiked it's up It's good Okay yeah You knew
we were going to start their well in finance Land
and equity kicker is usually a deal sweetener for debt
or lenders So shmoop akane valley bank loans whatever Dot
com five million bucks at eight percent interest but with
a catch and not a football catch get down The
bank doesn't feel that eight percent is enough to cover
the risk and well other craft that whatever dot com
brings with it they ain't google So in addition to
the eight percent interest shmoop akane valley bank wants an
equity kicker in the form of us A three percent
warrant coverage That is they want three percent of the
value of the loan of five million bucks or one
hundred fifty thousand shares or warrants to buy a share
It's like a really cheap price The option of whatever
dot com thrown in as part of the deal those
one hundred fifty thousand shares our equity and they kick
the debt deal to potentially be worth a lot more
Should things go well at whatever dot com but yeah 00:01:09.099 --> [endTime] We're not hopeful