About Northway

Understand the asset first

Each of our areas of focus depends on a specific source of cash. It might be a merchant’s future sales, the proceeds of a legal claim, or a schedule of consumer installments. We believe the work starts there.

The practical questions are how the asset produces cash, what governs it, and what could interrupt it. Complexity does not, by itself, make an asset better or worse. It makes those questions unavoidable.

Build terms around cash flow

Many specialized assets do not pay on a fixed calendar. Remittances can rise and fall with a merchant’s sales, and proceeds from a legal claim depend on how and when the case resolves. We think the structure of a financing should follow that timing and those legal features rather than force them into a template. Reporting and payment priority are where an understanding of the asset is written into terms both parties accept.

Be candid with counterparties

Reputations travel within specialized markets. We believe a counterparty should know from the first conversation what we need to see, and why. Clear terms, and candor when circumstances change, are what keep an agreement workable. We would rather say no early and explain the reason than prolong a process that will not reach agreement.

Sourcing

We usually begin with a company that originates or services assets in one of our six areas, or with an intermediary who knows that market. The first conversations cover how the business originates and collects on its assets and what kind of capital it is seeking. When the fit is clear on both sides, the work moves to underwriting.

Underwriting

Underwriting starts with the asset rather than the headline terms. We review how the assets are originated and collected, the contracts and rules that govern them, and how comparable assets have paid in the past. We also look at the people and systems that service the assets day to day. The result is a view of how the cash flow behaves when conditions are ordinary and when they are not, and that view shapes the structure.

Structuring

This is where the underwriting becomes an agreement. We set terms around the asset’s cash flow: the timing of collections, the reporting we receive, the order of payments, and what happens if collections fall short. We negotiate terms directly with the counterparty and document them with outside counsel. The reporting agreed at this stage becomes the basis for monitoring.

Monitoring

After signing, we follow the agreed reporting on collections and asset data, and we stay in regular contact with the counterparty. When conditions change, we discuss the change early and directly with the counterparty. What we learn in monitoring informs how we approach the next conversation in that market.