Venture debt lender Burns Funding has announced a partnership with captive manager Risk Management Advisors (RMA). The collaboration is designed to support Burns Funding’s alternative lending programmes, specifically the 'Burns Funding Method' (BFM). Under the BFM, borrowers obtain capital through bridge funding or the purchase of shelf corporations. Clients remit a percentage of the loan proceeds back to Burns Funding, which then deploys the capital into passive investment programmes, such as eCommerce stores, exotic car rental dealerships and short-term house rentals, to service the loan. RMA, which describes itself as the fifth largest manager of insurance companies in the world, will manage the captive insurance company for Burns Funding to provide a financial guarantee for these transactions. Peter J. Burns III, founder of Burns Funding, comments: “Risk Management Advisors is an extremely important foundational piece for the Burns Funding Method. Should unforeseen circumstances occur, RMA makes sure that Burns Funding and, by extension, its clients are made whole.” Specifically, the captive will guarantee payment and ensure the insurance structure remains compliant. The insurance premium is deducted from the loan proceeds remitted by the client, triggering coverage without additional expense to the borrower. Wesley Sierk, president of RMA, says: “What Burns Funding is doing is tantamount to providing free money. Clearly, Peter’s acumen around innovative alternative lending programmes and experience with passive income entities, make Burns Funding an attractive partner for RMA.” Sierk equates the programme to a common practice in the captive industry involving jewellery insurance: “We provide insurance to the jewellery store so that if a diamond falls out of a ring, the purchaser of the ring is covered. This isn’t a warranty, but rather a financial guarantee. We provide a guarantee for the outstanding balance.” Based in La Jolla, California, Burns Funding helps entrepreneurs secure alternative financing, including the use of shelf corporations to access upwards of US$1.6 million in capital.
