Illustration of a Typical Collateralized Installment Sale
A
1. S.Crow Collateral Corp. contracts to purchase the seller’s business, real property or other asset, at full price, on an installment contract which is non-recourse other than to the collateral.
2. S.Crow Collateral Corp. re-sells for cash, which is paid by S.Crow Collateral Corp’s buyer into escrow at closing.
2. S.Crow Collateral Corp. re-sells for cash, which is paid by S.Crow Collateral Corp’s buyer into escrow at closing.
B
The escrowholder pays the cash proceeds directly to the financial services firm selected or approved by the seller, to hold as collateral for the installment obligation to the seller.
C
The financial services firm purchases or issues, in the name of S.Crow Collateral Corp.’s “vault” company, such categories of marketable securities, financial instruments or other assets as the seller agrees to accept as collateral, all of which remains under the control of the financial services firm.
D
The financial services firm makes the installment payments to the seller on S.Crow Collateral Corp.’s behalf, from the collateral assets or their earnings, and then pays the purchase price in full at the time specified in the installment contract.