An Expense Reserve is an allocation of capital reserved for third-party expenses to be paid after the dealâ€™s close. An expense reserve is typically used by complex structure entities who have a known expense coming up (such as a large legal bill) that is not fully known at the time of asset purchase. Though rarely utilized by SPVâ€™s, Expense Reserves can be facilitated by Assure if needed. Additional banking fees will apply in these circumstances.
It is a common misconception that an Expense Reserve is required to pay for the Assure admin fees. With the SPV structure, fees can come from the raise itself so an expense reserve is not needed for this specific purpose. Assure takes a deposit up-front and the remainder is collected from the fundraise at the time the investment is made and the deal is closed.