Regulatory Compliance & Transparency

Compliance & Safe Harbor

Pilothouse operates strictly as a Commercial Credit Strategist, maintaining clear boundaries between commercial debt placement and regulated securities activity. Our dual-fee structure and "White List" screening ensure full compliance with SEC/FINRA thresholds.

Structural Compliance & Regulatory Thresholds

Our operational framework and service boundaries

Pilothouse (a dba of Rhino Consulting LLC) operates strictly as a Commercial Credit Strategist & Placement Agent. Our services are focused on the optimization of loan marketability and capital structure efficiency for mandates ranging from $5MM to $250MM.

Debt vs. Securities

We do not participate in the sale of securities, equity interests, or investment contracts. Because our scope is limited to commercial debt, we do not cross the regulatory thresholds that require registration as a broker-dealer under the Securities Exchange Act of 1934.

Advisory Nature

Our role is to act as a force multiplier by preparing high-fidelity data packages. We are not a licensed Investment Advisor (IA) or CPA, and we do not provide fiduciary financial management or tax planning.

Fee Structure & Transparency

Our dual-fee ecosystem provides clear audit trails and aligns compensation with the complexity and value delivered

Advisory Fee

A³ Technology Audit & Strategic Packaging

Distinct service charge for the use of Pilothouse A³ Technology™ and the intensive Diagnostic Triage performed by Pilothouse.

Non-Mandatory: Not required for all clients
Introduction Discussion: Scope addressed at time of introduction
Clients may move directly to placement if data already institutional-grade (forfeit "Red Flag" screening and A³ optimization)

Placement Fee (Success Fee)

Successful Funding Execution

Designed to align with the financial realities of the transaction and act as a force multiplier, not a burden.

Lender Compensation Offset: May be offset (partial or full) by lender-paid compensation
Good Faith Adjustment: Will negotiate to adjust/restructure if fees impact deal viability (LTV or DSCR limits)
All fees subject to negotiation and commensurate with mandate complexity

The Pilothouse Safe Harbor: Our dual-fee structure provides a clear audit trail of work performed. The Advisory phase covers engineering and ingestion, while the Placement phase covers institutional execution. This separation ensures Pilothouse remains a compliant, high-precision partner focused on reducing submission noise and maximizing certainty of close.

Debt vs. Securities Screening

Our "White List" and "Black List" framework ensures all engagements align with our mandate for Loan Marketability and Capital Structure Efficiency, filtering out transactions that trigger SEC/FINRA securities regulations

The Pilothouse "White List"

Safe Commercial Credit Activities

These activities focus on loan marketability and capital structure efficiency. They are generally exempt from SEC/FINRA broker-dealer registration.

Regulated Institutional Lenders: FDIC-insured banks, Credit Unions, SBA-approved lenders
Commercial Asset-Based Lending (ABL): Financing secured by Machinery, Equipment, RE, AR, Inventory
Factoring & Purchase Order (PO) Financing: Selling or borrowing against specific commercial contracts or invoices
Institutional Private Credit: Established Credit Funds or Life Insurance companies with sophisticated due diligence
Lease Financing: Equipment or fleet leases where "lender" retains ownership of asset
Bridge Loans (Commercial): Short-term debt for specific commercial purpose (e.g., property acquisition, cash flow gap)

The Pilothouse "Black List"

Regulated Securities Activities

These triggers may shift the transaction into SEC/FINRA jurisdiction. Engagement in these without a license creates significant regulatory risk.

Fractionalized Notes: Splitting large debt into smaller notes sold to multiple individual investors
Convertible Debt: Debt instrument with option to convert principal into equity/stock
Promissory Notes for "Passive" Investors: Issuing debt to individuals relying solely on borrower's efforts for return
Success-Based Fees on Private Capital: Percentage commission for "finding" private individual investors for debt offering
Debt with "Kickers": Loans with warrants, profit-sharing, or residual equity participation (viewed as "Investment Contracts")
Public Solicitations: Using social media/public advertising to find "investors" rather than contacting institutional "lenders"

Boundary Safeguards

Quick-reference rules to determine classification

The "Sophistication" Rule

If the lender is a bank, they are a "lender." If the lender is an individual or group of individuals, they are "investors."

The "Profit" Rule

If the return is a fixed interest rate (plus standard fees), it is "debt." If the return fluctuates based on company's net profits, it is likely a "security."