Taking the risk out of restaurant financing
inKind Credit Fund, LP presentation
Q4, 2020
Typical Forms of Restaurant Financing
They all failed during COVID
Equity Investments
Very high risk
Loans
High risk
Merchant Cash Advances
High risk
inKind financing was designed to reduce risk
During 2019, our default rate was 1.8% in 2020 it is 0.1%
How inKind Finances Restaurants
First: inKind buys credit in a restaurant
Then: inKind sells the F&B credit to consumers
How the fund is paid
inKind credit fund receives 7% per purchase of food credits, and on average it takes 7 months to sell the food credits.
Guaranteed minimum 9% annualized return for the first year for investors.
The quicker we sell credit, the quicker we can re-deploy
capital, increasing gains.
inKind's Unique Financing Model
Greatly Reduces the Risk
We only lose money if we cannot sell the F&B credit AND the restaurant closes
inKind is incredibly efficient at selling restaurant credit
Financing that is great for investors, and also consumers and the restaurants
Restaurants
Low cost capital
No Equity
No Loan
Consumers
Bonus credit

inKind
Quick recoup of capital
WIN for restaurants

Our low cost of capital allows us to work with great restaurant groups
WIN for consumer

We sell the our credit by offering a bonus
WIN for inKind

Low risk with consistent returns

2020:

0.1% losses

7% yield

Even during COVID
The proof is in the pudding
85% of restaurants work with us multiple times
Historic Returns
426
Restaurant Partners
$11.5 Million
In Funding Provided
13%
Average Annual Yield
inKind Risk: The restaurant closes while we still hold credit
inKind greatly reduces the risk in restaurant finance
Perceived risk - 90% of restaurants close in 5 years.

Actual risk: We are in and out of a restaurant deal in 7 months, and can predict and help maintain them for this long.
1. We use underwriting to determine how much credit to purchase
Financials
Is the restaurant currently sustaining itself?
Social Validation
Is there a market for the F&B credit?
Offer Determination
How much credit
can we sell?
2. We prevent inKind funded restaurants from closing
We provide cashflow management help (for independant pay their rent and sales tax)

Online marketing for restaurant to increase revenue
3. In the worst case, we still recover capital
Sell credit quicker
Increase the bonuses to sell credit quicker
Secured Credit and Personal Guarantees
We require personal guarantees for owners of the restaurant
Enforceable Contracts
We've had 100% success in winning arbitration awards
The Fund's Team
Johann Moonesinghe
Fund Manager
Andrew Harris
Fund Manager & Risk Analyst
Derek Keller
Finance Director
inKind Credit Fund Details
COVID-19 has presented a once in a lifetime opportunity to fund restaurants.


Raising $50m into Credit Fund
Projected Fund Portfolio Composition
85% of inKind's portfolio is in restaurant groups with $10MM+ revenue
Category I: Independent
10%
Target Portfolio Composition

Annual Revenue of
up to $2MM

Typically 1 location with owner-operator
-
< $50k
Financing Amount
Category II:
Small Group
15%
Target Portfolio Composition

Annual revenue of
$2M - $10MM

Typically 2 - 5 locations with back office support
-
$50k - $200k
Financing Amount
Category III: Medium Group
25%
Target Portfolio Composition

Annual revenue of
$10MM - $25MM

Typically 6 - 15 locations
with head office
-
$200k - $500k
Financing Amount
Category IV:
Large Group
50%
Target Portfolio Composition

Annual revenue of
$25MM+

Typically 15+ locations with management firm
-
$500k+
Financing Amount
Pipeline
Fund Key Terms
Returns
  • First 107% of F&B credit sales from a deal.
  • A 7% annualized preferred return on outstanding capital in a deal.
Liquidity
  • 60 day notice.
  • 12 month lock-up.
  • Optional Quarterly redemptions.
Integrity
  • Third party fund administrator.
  • Annual audit.
Fees
  • 1% management fee