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Raising the equity you need to for your project can be tough, especially in a region like the Caribbean where success is not as assured as it may be in a large center. Investors need to see the opportunity and the vision to choose your project. For many of the deals we see, there is not enough equity in the property, but that’s not a problem as we can help.
Providing Debt and Equity Solutions
A combination of debt and equity is our primary solution for clients who do not have the equity they need in order to qualify for traditional financing. An example of this might look something like this:
- Project Cost 100M US
- Client Equity 15M US
- Lender Equity 15M US
- Lender Debt 70M US
In this situation we are able to finance 85% LTC versus 70% on a straight debt solution. This makes the project much more viable for many small to mid sized developers who may not have the capital they need to fully fund or use traditional lending facilities.
How Much Equity Do You Need?
The amount of equity you require in your development can vary depending on the location and type of property. Generally, we see loans done with as little as 15% to 20% when we offer our equity solution. The debt portion will be in the 65 to 70% LTC range, regardless of whether we bring equity or not.
Keep in mind as well, the equity portion can be bought out at predetermined amounts, once you are in a position to do so.
The Benefits to Equity Solutions
For many clients, the struggle to find capital can keep their project grounded for years. They may turn to alternative solutions like partnerships, joint ventures or opportunists who want a piece of your business with eyes on the rest. Generally partnerships are good in theory but they can be messy. By using our equity solution, you have the silent partner you want to keep the vision of your project intact.
Unlike a joint venture, our equity is easy to buy out, and is only there when you need it. Talk to us today about your project and how we can assist you in making it happen.
