FAQ

Below are some commonly asked questions regarding Steel Returns
If you have further questions feel free to contact us at 541-743-2906 or Investments@SteelReturns.com.

How it Works

How many Investors can be in The Fund?

The Fund could have hundreds of Limited Partners, and many Partners will own several units. Keep in mind, the number of Limited Partners doesn’t affect your return as your earnings are based on the
percentage of The Fund you own.

What is my financial commitment?

The minimum commitment is $25,000. The maximum is $10,000,000. After your initial $25,000 purchase, you can add any
amount at any time.

When do I deposit my funds?

Funds are accepted at the time you execute the Subscription Agreement. It should be noted that, while your investment may have been deposited, it won’t move from a non-interest-bearing “subscription account” to The Fund until the General Partner has accepted your Subscription Agreement by counter-signing it. The time frame between depositing your funds and being accepted into The Fund by the General Partner can vary from instantaneously, to several weeks, depending on the availability of assets to purchase. The investment team can give you an estimate on how much time that might be when you execute the Subscription Agreement.

How many different loan receivables will the fund own The General Partner will seek to buy loan cash flows secured by assignments of receivables up to the then current balance of The Fund. The average auto loan amount The Fund targets is approximately $11,000-$13,000, providing a great level of diversity.

May I use my IRA to invest in Steel Returns?

Yes, and many do, using a custodial company. Our Investment Team will help facilitate this simple process.

What will my return be?

The Fund has a Preferred Return of 10 1/8 % annually.
The Preferred Return is the amount the General Partner anticipates distributing to all Limited Partners on a monthly basis, after all costs and fees have been satisfied. Any amount over the Preferred Return will be split evenly between the General Partner and the Limited Partners on an annual basis.

While the Preferred Return is 10 1/8 %, the return to the Limited Partners is dependent on the payment performance of the loan receivables acquired by The Fund. It is possible the return will be less than 10 1/8 %. The General Partner’s goal for The Fund is to maximize Limited Partners returns while protecting their principal.

It should be noted the General Partner is acquiring receivables with high interest rates and higher risk. The projections, repossession costs and fees have been taken into consideration and accounted for while still returning a preferred return of 10 1/8%.

How does the General Partner get compensated for their work?

The General Partner receives an amount equal to 20% of all collected income. 10% is for servicing the loans and 10% is for managing The Fund. These fees are accounted for and still provide a net Preferred Return of 10 1/8% to Investors.

When do I get the earnings on my investment?

Limited Partner distributions are disbursed via direct deposit on the 15th of the month, unless you direct the General Partner to reinvest your distributions automatically. You can make this selection in the offering documents if you decide to reinvest.

When it comes time to file my taxes for the year, what documentation will I receive?

The General Partner will have the Partnership’s tax returns completed by an outside accounting firm. Once the return is ready, each Limited Partner will receive a K-1 form showing their income, by March 15th following each calendar year.

If I want to withdraw from The Fund and get my money back, how does that work?

The Limited Partnership Agreement allows for withdrawal, however, the units are a long-term investment. If you want your funds 100% liquid, this model is not for you. You can review the withdrawal guidelines in Section 9 of the Limited Partnership Agreement.

Can I sell my investments or gift it to a family member?

Yes, however any transfer must be approved and facilitated by the General Partner as detailed in the Limited Partnership Agreement.

What is my security?

When you invest in The Fund, your money is being used to purchase auto loan receivables.

Receivables of consumer loans are secured by assigning of the right to the receivable to The Fund. Under our illustrations, Steel Lending would assign the right to the loan payments to The Fund. This assignment gives The Fund the security of the loan payments, while minimizing the legal risk of enforcing the loan.

Our Vision

What is the projection for growth over the next 5 years for Steel Returns (the “Fund”)?

Now that we have a three-year track record, we anticipate volume growth of 75-80% next year and 50% for the foreseeable future years thereafter. This aggressive growth provides our investors with more diversity while we enjoy economies of scale.

What is the historical average growth in dollars or percentage (for Steel Returns or other companies that you compared your goals to) and how does that compare to where you are now with the company goals?

Now that we have a three-year track record, we anticipate volume growth of 75-80% next year and 50% for the foreseeable future years thereafter. This aggressive growth provides our investors with more diversity while we enjoy economies of scale.

Is there a cap on the total amount of dollars under management that you feel comfortable with for the Fund?

We feel that with the leadership team we have in place, we can effectively manage a portfolio of about $250 million. The assets we target and acquire are straightforward loans with a largely automated buying platform. This streamlined process and technology allow for, and were designed for, rapid growth. Rather than adding additional highly-compensated leadership positions to our team, we will continue to grow our middle management positions for buying, funding, accounting, collections, and loss recovery.

Does the Fund expect to expand to other geographic locations?

Yes. We currently purchase loan receivables from Oregon and Nevada. We project that we can double our business in those two states alone by continuing to focus on our strategic buying parameters. These parameters, set in Q1 2023, are producing better returns than a wider buying box would.

In Q2 2025, we anticipate exploring other states that have lender-friendly regulations. A welcoming business climate with less regulation is far more important than geographic location.

How does the Fund compare in size to other comparable auto finance companies (regardless of how many years in operation)?

We are small for now. While no good numbers are publicly available, several firms have portfolios exceeding half a billion dollars.

Is there a lot of competition in this market?

Yes, our “customer” is a small, locally-owned auto lot. As competition continues in every sector, we anticipate the overall private money loan pool will become smaller in the future. However, we don’t want most auto loans; we target loan amounts between $10-12K. These loan assets are abundant as most of our competitors seek higher loan amounts. Our analyses show that on average, higher loan amounts come with a higher default rate as well.