The concept has found some eager takers with emerging coal bed methane producer Queensland Gas Company (QGC) recently securing an $8 million facility.

As an alternative to the standard debt facility, placement or convertible note style of financial instrument, Cornell Capital Partners offer an equity line of credit facility that combines the features of a traditional share placement with some of the flexibility of a banking line of credit.

Under the facility the company may draw down funds by the issue of shares to Cornell at any time over the life of the contract, giving the company complete control of the timing and amount of the drawdowns.

Accounting firm Jackson Greeve has been selected as Cornell's agent in Australia after a successful track record in assisting companies to raise capital both here and in the United Kingdom. Partner John Greeve said the greatest attribute of the product was in its flexibility and the absence of nonusage fees or hidden costs.

"A company will be able to drawdown on the equity line at any time by simply giving us a share placement based on the average price of the shares over the next five day trading period.

"Then as the company grows it can also increase the size of the facility," said Greeve.

Cornell has set a minimum market cap of around $10 million for prospective clients, offering equity lines from around $8 million up to $250 million.

Cornell also places no restrictions on other fund raising activities the company may wish to explore and does not seek to influence the company's management.

"Although there are few restrictions on which companies Cornell may invest in we do conduct reasonable levels of due diligence. By using the Cornell facility we would expect to see some appreciation in the company value which will be of benefit to shareholders and make the company more attractive for future investors."

Cornell's first ASX listed client was coal bed methane developer, Queensland Gas Company (QGC), which secured an $8 million facility.

QGC's managing director Richard Cottee said the new source of funding provided the company with the financial strength to achieve the commercialisation of the vast coalbed methane resource in Queensland's Surat Basin.

"Our plan is to develop four petajoules of new gas sales each year from 2007. This additional funding gives us the financial wherewithal to compete for new contracts," he said.

Under the terms of the facility, QGC may, at its discretion, issue shares to Cornell at any time over the next three years, up to a total of $8 million.

The product would be particularly enticing to the mining or oil & gas sectors where the search for capital is an ongoing battle as companies struggle with long lead times from project start up to the time it comes on line.

"As the Prosser Inquiry has stated the Australian market has also proved very difficult from which to obtain capital for resource exploration and it has got to the stage that unless you have a huge project it will be very difficult to get capital," said Greeve.

"These companies can spend many millions of dollars before they get a positive cash flow. We come in at a stage where other financing options are limited, time consuming and expensive to pursue. Importantly the equity line is easy to use and not dependent on market conditions or government incentives," said Greeve.

"We also expose the company to the international investment community. Jackson Greeve have follow up services including the provision of American Depository Receipts, and traditional corporation advisory services.

"The equity line enables the directors to concentrate on their company's core business. I know from personal experience that emerging companies spend a lot of time worrying about where they are going to get the money to move forward. With this facility funds are there on call to be used or left as a back up."

The shares are issued to Cornell at a three percent discount to the prevailing market price with a commission of five percent payable at the time of each issue. Cornell anticipates that a company can be lined up with the facility within forty days of expressing an interest.