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Frequently asked questions

How does the investment work?

Investors purchasing Membership Units will become Members of the Fund. Subject to performance of the Fund, and after paying certain Fund Expenses and the Management Fee to the Manager, Members will receive a Preferred Return of 7%, paid monthly. Members will also divide with the Manager on a monthly basis any Excess Distributable Cash (“EDC”) with 50% of this amount going to Members and 50% going to the Manager. The Preferred Return shall be Non-Cumulative, meaning that any shortfall in a given month shall not carry forward. Based on comprehensive financial modeling performed by the Manager, the projected overall return to Members is estimated to be between 8% and 9% however, these returns are not guaranteed. Members will be issued K-1’s annually.

How much can I invest? What is the minimum?

$500,000 per unique Investor is the minimum investment, which amount may be adjusted in the sole discretion of the Manager. There is no set ceiling on the amount of investment for each unique Investor.

Who manages the Fund?

The Manager of the Fund is Associated Finance Company, a Minnesota limited liability company (“AFC”). AFC is owned and managed by Associated Finance Company. AFC and Associated Finance Company executive offices are located at 5353 Wayzata Blvd, St Louis Park, MN 55416, USA.

Does the Manager (and/or its principals) have any skin in the game?

The Manager intends to invest a portion of its EDC into Units of the Fund on an ongoing basis as long as the Fund is not in liquidation. In as much as the Manager will need to monitor its ongoing cash flow, fund its operations, and keep adequate reserves, investing a portion of its EDC in the Fund is not a requirement in the Fund’s Operating Agreement. However, the Manager intends to attempt to accumulate a meaningful investment in Units of the Fund over time. Potential Investors are encouraged to contact Ronald Garrett for further discussion on this topic.

How often are distributions made to Members and in what amounts?

Subject to the Fund’s performance and sufficient cash flow, the Manager intends to pay the Preferred Return, as well as the allocable portion of any Excess Distributable Cash (as the Manager deems to be in the best interests of the Fund), to the Members on a monthly basis. Members will share Distributions in proportion to their respective Ownership Interests.

Can I reinvest my distributions?

Members shall have the option to receive any Distributions either paid to them via check or ACH or to use these funds to automatically purchase additional Units at the prevailing Unit Price. Members shall make such an election at the time of subscription and may change this election with a 90-day notice to the Manager and not more frequently than twice per year.

How does the Manager get paid?

The Manager shall receive as income :

A Management Fee of 2% (annualized and paid monthly at .1667%) of total AUM.
50% of all loan origination fees collected (with the other 50% going to the Fund).
100% of all late fees actually collected from Borrowers.
50% of any Excess Distributable Cash (“EDC”) after having paid the Members the Preferred Return.