Financing a resort in the Caribbean can be challenging. Not only is it difficult to find the capital, but you need to avoid the pirates that exist in the market. Working with a reputable broker and lender is imperative to avoid unnecessary costs, and save valuable time in getting your resort off the ground.
More often than not, clients who come to Carib Capital have already spoken with one or more lenders. Either the terms were unsatisfactory or the lender was unable to help. In many cases however, the client paid out upfront fees only to have the deal not go anywhere. Sadly, this happens all too often in the Caribbean.
So how do you avoid being a victim of these lenders? Do your homework! Try to find out as much as you can in terms of what they have financed in the region, and what the costs were for those deals. Just because a lender has done a deal in Florida, does not mean they have the ability to finance a deal in The Bahamas.
So if you read the last paragraph and came away with the understanding that you should never pay upfront fees, you would be incorrect. Lenders who spend months putting these deals together will want to be paid for their time and diligence. Working for free is never a good business model. You need to know however that the lender you are working with has the ability and capital to fund your project.
Ideally, we try to work with lenders who will underwrite your file upfront. This ensures that they have capital backing, and any fees they request will be for diligence on the project (ie site visit). Issuing an LOI without any underwriting or due diligence is a red flag, financing projects in the Caribbean is not that simple!
The amount of time it takes to put your financing together can vary quite significantly depending on the type of project you are looking to finance. Something that is not yet shovel ready will take much more time than something that is already operational and making money. As a general guideline however, you will be looking at 60-120 days to arrange the capital for your project.
In short, there are no quick and easy solutions to financing a resort in the Caribbean. Time, money and due diligence will be required on the borrowers part. Talk to us today about your Caribbean project!