Risk Factors
Starting with the fact that we are facilitating transactions of pre-sold product, with an already issued purchase order from long-term well established buyers, most of which have an A rating. We are not in the business of purchasing product and then looking for buyers. Our buyers are consistently in the market as part of their ongoing business; their timely payment is dependent on them getting the products they need to run their business. We constantly analyze and underwrite the amount we have at risk with any one entity at a time. Plus the transactions are very short term by nature, typically only 7 to 21 days. We work only with well respected brokers that have a well established relationship within the industry. Only those purchase orders meeting our underwriting requirements will be consider and funded. We verify accuracy of all of the information obtained from the broker involved with the transaction (weights, fees, prices, origin, delivery information, etc.) Verify the accuracy and legitimacy of the purchase order from the issuer (buyer). All funds are directly wired to the bank accounts of all of the parties involved to ensure a detailed paper trail is generated so all transactions can be tracked for accuracy. Additionally, even though the occurrence is extremely rare, we have legal agreements with the brokers that makes them responsible for the majority of the capital risk of a failed transaction. We have chosen to focus our business on frozen product with a long term shelf life so that spoilage is not a major risk. The product is insured from the factory and shipping company until it is received at the buyer’s destination. The product is well documented by government agencies and tested for human consumption. This part of the food industry has had historically a very low default risk. When you add the additional business practices that we at WF Lending follow on every transaction our goal is to eliminate all the risks possible. We take a pro-active approach to your investment as well as our own. Please feel free to contact us for additional information.
Although there is a certain amount of risk with anything we do, our single biggest concern at WF Lending is to find ways to mitigate as many of those risks as possible. Controlling risk is the overriding factor in most of the aspects of our business model and business practices.
