Royalty Investments

Royalty Investments are flexible loans designed for higher risk projects that do not qualify for the Northland Foundation’s other financing options.  Types of businesses that could benefit include start-ups, highly leveraged businesses, and entities with temporary cash flow issues that cannot be addressed through traditional financing sources.

To qualify for royalty financing, applicants must demonstrate long-term financial potential and a strong likelihood of repaying the investment from profits and cash flow. Major features of Royalty Investments include the deferral of principal payments, low interest rates, and the sharing of some profits with the Northland Foundation.

• Royalty Investments are generally limited to $100,000.
• The structure of a Royalty Investment involves repayment in two ways. First, repayment is made in the form of a low-interest promissory note. Second, repayment is also tied to a percentage of earnings and cash flow (the royalty). The amount of the royalty payments due over time usually does not exceed the total of the original investment.