Credit Enhancement Bonding and Insurance
The purpose of Credit Enhancement Bonding and Insurance is to reduce and/or remove the majority, if not all, of the risk facing a project/business so that the business/project can obtain and capture funding.
Credit Enhancement Bonding and Insurance is a proprietary program that is designed and delivered exclusively by GDI Insurance Agency, Inc. (GDI). Credit Enhancement Bonding and Insurance involves the utilization of principles, products and services from numerous disciplines with the inclusion of the copy written and proprietary GDI Funds Control Program to facilitate the financing necessary to promote the success of GDI client projects. Many GDI clients found that their projects were stalled before being introduced to GDI and GDI's Credit Enhancement Bonding and Insurance program and have been enthusiastically eager to share their stories of success following their engagement with GDI as a trusted, results proven provider.
In the video provided on this page, Grant Davis (President of GDI Insurance) shares a sampling of client projects GDI was engaged in and helped to attain their project's goal(s) through the utilization of Credit Enhancement Bonding and Insurance.
WHAT EXACTLY IS “CREDIT ENHANCEMENT BONDING AND INSURANCE”?
GDI has found it virtually impossible to summarize the basic concepts used in Credit Enhancement Bonding and Insurance, however the following is a “best effort” attempt to do so.
Credit Enhancement Bonding and Insurance is the utilization of, but not limited to, the combination of Insurance and Non Insurance risk transfers, highly evolved Risk Mitigation Strategies, Contractual Risk Transfers, both Standard and Modified Bonding Solutions, Advanced entity structuring (LLCs, Trusts - both simple and advanced, etc.), Captive Insurance Companies, Contractual Liability Policies (CLIPs), and even Charitable Foundations in select circumstances. All of which are coordinated with GDI's proprietary Funds Control Program that creates the glue to tie the entire program together and creates one fluid, custom program to meet each client/project's unique needs.
Since its inception, GDI's Credit Enhancement Bonding and Insurance programs have received acclaim and admiration from many in various financial arenas. Some such accolades have begun to go as far as to refer to GDI's Credit Enhancement Bonding and Insurance program as an “Insurance Wrap”. GDI's Credit Enhancement Bonding and Insurance program is not an Insurance Wrap but instead utilizes Insurance, Bonding, Contractual Risk Transfer and many other Risk Management and Risk Mitigation principles and mechanisms to create custom client programs that when accurately followed can reduce, if not eliminate, the risk of client default to a project lender for financier.
GDI's Proprietary Credit Enhancement Bonding and Insurance is a virtual Godsend to those individuals and organizations that possess wonderful projects which are simply having trouble finding and/or nudging along the appropriate Partner, Joint Venture, or Traditional Source of Lending. Through the utilization of GDI's Credit Enhancement Bonding and Insurance program, substantial amounts of risk facing the client's project can be reduced and/or eliminated while reducing overall costs at the same moment.
CREDIT ENHANCEMENT BONDING AND INSURANCE - What it is… and what it is NOT
Below are two terms and their appropriate definitions that are commonly confused and/or incorrectly used in the Credit Enhancement arena.
- INSURANCE WRAP
Definition: There are multiple definitions for an “Insurance Wrap”, however the most commonly referred to definition when it comes to Credit Enhancement stems from the comparison to the use of the term when used to represent an Owner Controlled Insurance Program (OCIP), Contractor Controlled Insurance Program (CCIP), etc.
- To add even more complexity to misuse of the term “Insurance Wrap” is that OCIPs and CCIPs are commonly used as components of some of GDI's Credit Enhancement Bonding and Insurance programs.
- CREDIT INSURANCE
Definition: Refers to the insuring of Accounts Receivable (A/Rs) against the risk of default by the party being billed.
- Although it does not constitute a Credit Enhancement program by itself, Credit Insurance can many times play an integral role in one of GDI's robust Credit Enhancement Bonding and Insurance programs.
- CREDIT ENHANCEMENT
Definition: Refers to the products and services intended improve the credit rating and/or credit worthiness of an entity in order to obtain (1) more favorable financing terms, or (2) to eliminate or circumvent road blocks that may be barriers to enabling funding to occur.
GDI's work through the implementation of its proprietary Credit Enhancement Bonding and Insurance program has led some to refer to it as Credit Positioning; as it has proven to assist GDI clients in increasing the favorability of terms during Credit Placement.
The concept of Credit Enhancement is not a new one; however GDI has seemed to experience considerable success via the expansion of the concept to be one that focuses on a holistic approach rather than the primarily fragmented designs of traditional Credit Enhancement products in the past. Through innovative proprietary products and structures, GDI has been able to provide its clients with considerable success from large scale projects ($1B+) to smaller projects ($5-10M+) and numerous projects in between.
There are a few financial professionals that have voiced their initial criticisms of GDI's Credit Enhancement Bonding and Insurance programs due to their lack of understanding of GDI's programs, which derive from the experiences many have had with others who have attempted to enter the Credit Enhancement arena in a halfhearted fashion. Once these finance professionals gain an understanding of GDI's programs and philosophy, they quickly become fans rather than skeptics.
CREDIT ENHANCEMENT BONDING AND INSURANCE - Why it works when others fail
Many competitors in the industry and associated with Credit Enhancement tend to focus their sights on their “thin and deep” area of professional expertise rather than on the direction that is most beneficial for their client. This type of situation typically comes from a professional being comfortable in their discipline and then choosing to focus on solutions for the client that are primarily, if not fully, in their discipline. When we look at other insurance professionals that are dabbling in Credit Enhancement, we notice that they are merely peddling the same insurance policies they have for decades, without much consideration for the ever changing economic climate. It is GDI's philosophy that as the economy and its industries/markets evolves, so must those that are trying to answer questions and correct problems/issues. Narrow mindedness does not provide robust enough problem solving for the complexities of today's entrepreneurial projects.
Time and time again, professionals at GDI find themselves realizing that the work they have to perform truly does not begin until the client's Lender or Joint Venture Partner of choice says “No”. However, GDI does this work for each and every client regardless as to whether or not they are pursuing funding as it also increases the security of their interests in virtually every endeavor.
For more information please contact GDI Insurance Agency, Inc. at 209-634-2929 or via email at Info@GDIIns.com
Matthew Davis, MBA, CPCU, AAI
GDI Insurance Agency, Inc.
Here is a letter of recommendation from Clark Construction Companies Senior Director of development.
Here is a brief video overview of our program.
A Partial List Of Just A Few Of The Projects We Have Worked With Using GDI's Proprietary Credit Enhancement Bonding and Insurance Program.
Please note due to the confidential nature of much of our work, we can only share basic information with the permission of each client. Our program works with small and large clients. Anyone having a business that must succeed should use our credit enhancement bonding and insurance platform even if they are not seeking funding. If your business must succeed you must call us.
- 1-17-13 GDI named broker for company that has developed a closed loop self sustaining electrical generator. Using GDI's Credit Enhancement Bonding and Insurance program GDI secured the manufacturing, copywriter, funds control and generally reduced the risk of this new company giving investors the secure comfort needed to invest in this company.
- 1-16-13 GDI named broker for technology company focusing on children education. GDI's Credit Enhancement Bonding and Insurance program helped this client obtain a large cash infusion to update software and install this software in order to meet their distribution commitments.
- 1-6-12 GDI named broker for technology company developing fitness focused high tech products. Using GDI's Credit Enhancement Bonding and Insurance program investors felt the comfort needed to invest in this company.
- 1-4-13 100MW Solar farm under construction GDI was named broker for this wonderful project. We worked to assure investors confidence in the PPA, by employing several of our insurance, non insurance and GDI's proprietary risk mitigation techniques.
- 12-12-12 GDI named exclusive insurance broker / risk mitigation using credit enhancement bonding and insurance for new recycling product that reduces the water content of waste, turns the waste into plastics to fuel electric generators or create oil. This company is a trash and recycling company game changer. As you know all trash is sorted. Plastics and recyclables are taken out. The sludge that is left is put into land fills. This company has invented a way to turn the sludge into plastic blocks that can power the machines needed to do the work sell off the excess electricity as well as turn the excess blocks back into oil. Cutting the cost to transport waste, dispose of waste and turn what is going into landfills as un-recyclable into energy and profits.
- 11-20-12 GDI named exclusive insurance broker / risk mitigation for Masque Studios new studio in Park City, UT! "GDI's credit enhancement bonding and insurance program helped secure our project"
- 11-9-12 GDI named broker for large sea food distributor: Using GDI credit enhancement bonding and insurance program to help investors fund expansion
- 10-14-12 $13,000,000 lease option on Beverly Hills Homes. GDI using credit enhancement bonding and insurance helped secure a lease option on a home for sale in Beverly Hills. Using our proprietary program we were able to reduce the risk for the sellers which allowed our client to purchase their dream home. Credit enchantments bonding and insurance can be used to help secure many transactions.
- 9-24-12. GDI Named Insurance Broker / Risk Managers for United Nations WSA - IGO Humanitarian Projects: "Click Here For More Grant Davis President of GDI"This project is a wonderful use of GDI's Credit Enhancement Bonding and Insurance Risk Management Platform. We are greatly honored to have our work assist in helping so many others" GDI is helping the United Nations promote:
- Expanding international commerce while acquiring improved quality of life for citizens around the globe.
- Provide commercial and residential facilities to include community services such as Government sponsored Transportation systems.
- Water and food supply/ farming /Homes, Retail Shopping, Tele-‐Communication/Mobile Phones and Internet, Sports Facilities, Physical Education & Leisure (SPEL), as well as MDG Training Centers geared towards the Youth
- $1.8B Mixed Use Development (TX) - GDI's proprietary risk management platform, credit enhancement bonding and insurance combined wtih GDI's Funds Control Program, was used as the foundation of the debt and equity structure to eliminate the need for a standby letter of credit. The platform was later used to locate and negotiate funding from an entirely different source under much more favorable terms than those that GDI was originally approached to assist with.
- $2.2B Mixed Use Development (TX) - GDI's proprietary Risk Management platform was used to fortify the foundation of the business plan in order to obtain funding.
- $100M Debt Refinance for Medical Imaging Company (NY/FL) - Utilizing Human Resource and Compliance methodologies in conjunction with GDI's proprietary Funds Control program, our client was able to successfully refinance their debt.
- $30M Working Capital Loan for Business Consulting Company (CA) - Using a combination of GDI's proprietary Funds Control program and advanced Risk Management strategies, our client was able to obtain and close on a $30M loan for working capital.
- $1B Power Purchase Agreement - GDI applied the same principles as the projects above and enabled our client to obtain the purchase agreement they desired and the client has since committed to providing no less than $1M for a local homeless shelter for Turlock, CA.
- $6M Custom Home (TN) - GDI's same principles enabled our client the ability to construct their dream home.
- FUNDING FOR A TURLOCK RESIDENT'S DREAM - GDI is in the process of working with a local resident to construct their dream in Turlock. We'll provide more details on this one as the project progresses.
- $1,000,000 commitment for a homeless shelter in Turlock! A personal passion of mine to help the Addicted and homeless. One of our developers has agreed to donate $1,000,000 to help us build a homeless shelter here in Turlock. Other developers we work with have also agreed to help support this project, but have yet to give written commitments.
Here is the text from the letter from Clark Construction recommending and demonstrating the power of GDI's exclusive credit enhancement and mitigation program as it has helped specific projects.
I would like to thank and recommend GDI Insurance Agency, Inc. and yourself to any client that has advanced risk management, financial placement, insurance, bonding, or credit enhancement needs.
When we met a little over a year ago I was working on two multi-billion dollar mixed-use developments in Dallas Texas. Getting them off the ground, pre-construction services, development team assembly, project phasing, market strategy, financing, etc... As the developers pursued several funding strategies, it became apparent that they needed to create a strategy to manage both short-term pre-development risks as well as long-term construction risks in both projects to attract equity and debt investors to their projects.
You broke down the projects to their core, identified all the risk associated with building and then running the projects once they were completed. Honestly I had never seen anyone more knowledgeable in risk identification than you were. You said, "if we do it right we protect both the owner and the investors equally." Managing and removing the risk as you did, helped investors and owners as well as contractors all feel secure with their decisions to move forward.
After you identified all the risk, you put together solutions. One at a time you created risk mitigation solutions that removed or greatly reduced the risk of developing the projects. Even creating a funds control program that addressed concerns and provided executable solutions for the owners, investors as well as Clark as the general contractor.
In all my years I have never met anyone that has a better grasp of contractual transfers, risk mitigation's, Osha compliance, finance and just plain determination to do it right. Adding protection for everyone involved, while at the same time saving the developments 10's of millions dollars.
I would recommend to any business, no matter the size, that they retain GDI as their insurance broker. Further, I would encourage anyone with a difficult insurance or risk mitigation problem to engage you and your firm. Frankly, GDI cares more, knows more and works harder than any other broker I have met.
Like you have said, "anyone can help someone buy insurance", however very few other brokers have the knowledge and strength of character to truly help a company succeed.
Grant it is a pleasure to work with you and please have anyone who would like give me a call.
Senior Director, Mixed-Use Development
Clark Construction Group, LLC
7500 old Georgetown Road
Phone 301/272-8100 Fax 301/272-1928
Bethesda,. Maryland 20814-6133