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Dealers and collectors become guarantors for various reasons besides the financing fee.
If he chooses to be the guarantor, he can either win the work or win a financing fee or both.
Barclays comes across as concerned not with its client Del Monte, but solely with obtaining a second financing fee and aiding its private equity clients to the detriment of the target companies.
Christie's and Phillips said that they allowed guarantors to earn a financing fee, even if they bid successfully for a work, because to do otherwise might dissuade them from bidding and, thus, deprive a seller of the best price.
If bidding is more robust, then the guarantor receives a financing fee (calculated, usually, as some fraction of the difference between the guarantee and the final price, plus half the buyer's premium).
For example, if a guarantor's bid of $12 million turned out to be the winning bid, the guarantor would not pay the full $12 million because he or she still gets the cut — called a financing fee — of any amount above the $10 million guarantee.
Similar(52)
When the invoice is paid, the business owners get paid, minus the financing fees.
Expenses related to the acquisition, including accounting changes, financing fees and bonuses, cut profit by $16.4 million.
It has said the loan was for professional and financing fees.
Sotheby's only pays financing fees to guarantors who ultimately do not purchase the works they are guaranteeing.
One controversy revolves around the way third-party guarantors earn "financing fees" at the two main houses.
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