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 Insurance Agency, Inc. 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)
- 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.
Custom Enhancement Bonding Insurance Program
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”. Our 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 our 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 another letter of recommendation:
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 GDI.
- Mixed Use Development – GDI’s proprietary risk management platform, credit enhancement bonding and insurance combined with 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.
- Mixed Use Development – GDI’s proprietary Risk Management platform was used to fortify the foundation of the business plan in order to obtain funding.
- GDI Named Insurance Broker for the World Sports Alliance United Nations Humanitarian Partnership in support of millennium development goals, and their related international projects.
As H.E. Mr. Alain Lemieux, President of the WSA says of GDI: “As we interviewed GDI we found they were the most versed insurance professionals we had encountered. They have the ability to take very complicated risk and insurance concepts and lay them out so that all can understand them as well as then being able to support their work with the details demanded by the toughest critics. It is truly rare to find such technical competence in our worldwide search for our insurance partner, coupled with a heart for the work we are doing. We have truly been fortunate to find such rare individuals as those that make up GDI Insurance with GDI’s ability to secure our projects, we shall make a material difference in the lives of millions over the next decade”
- Diamond Mine S. Africa- Advanced use of bonding, insurance, trade credit insurance, Directors and Officers – D&O, contractual transfers, and performance bonds to guarantee out put coverage.
- Hospital – Ghana Ground up GDI protects the cash flow, from design, to build, to daily operation GDI provides all programs needed to properly mitigate and insure the risks of the hospital and physicians group running it to assure the fulfillment of the humanitarian and business purposes of the hospital.
- Pigment Manufacturing Plant – New York. GDI Insurance Agencies, Credit Enhancement and Bonding program helped this project gain it funding to acquire the the manufacturing plant, buy and install all the equipment, insured the take off agreement, and get up and running.
- Waste to Energy Plant -TX