Lewis Hart

It revolves up and down.

The big variable that is always tricky is what's the price of that commodity at the time of the loan?

And these structures are designed to give clients flexibility to buy the copper, whether it's $6 a pound, $4 a pound, $7 a pound.

it's hard to predict these capital needs.

And that's most lenders like fixed amounts.

This is a floating dollar amount, which is kind of a unique part of it, where the value of the loan changes as the price of the commodity changes.

Yes, so good question.

So think about a client who's buying a pound of coffee, right?

Think about your local coffee shop here.

That coffee bean traveled 2,000 miles from somewhere likely in South America.

It went through a whole process of milling and exporting.

It went on a ship.

It ended up at a roaster in the U.S.

and finally made its way to a retail shop elsewhere.

in Manhattan.

There's a ton of capital involved there.

That client likely agreed to buy that coffee several months in advance.

The time when they actually fix the contract and pay is when the coffee ships typically.

And at that point, we don't know if the price is going to be $3 a pound, $2 a pound.

$1 a pound.