2009 and beyond
For those Developers who have been searching for development financing for the past 12+ months, I’m sure you have witnessed that securing funds to develop your project has been quite tough.
The reality is that securing Development money IS possible provided you are working with the right people, you have a strong project and you have "some skin in the game" (cash). In the past 2 months we have been seeing a gradual improvement to funds loosening up and becoming available. The projects that are having the most success in making it to a closing / funding are the following:
- Client has a Financially Strong Project
- Client has a professionally prepared Business Plan & Pro-forma
- The Developer is experienced and has experienced people / companies as part of their development team
- The Developer has money already invested into their project, at least 10% of the requested loan amount or MORE!!
- The Developer has a strong Net Worth and a sizable amount of Liquid Assets.
Basically what the lender wants to see is that the project “makes sense” and has a high probability to be profitable….. basically, the lender wants to make sure they will get their money back in a timely fashion.
Another aspect about the projects that are funding today, ...... a high percentage of them are being financed through either structured financing or private placement loans. What this means is that the funding sources are leveraging money, either their own money or the money of the developer to create significant cash to fund the project. The unfortunate part about this is that MOST US based developers have never heard of this method and therefore do not believe in it’s capability.
The best way for these people to be informed is to consult with an attorney who is licensed with the SEC or work with
International Financing Solutions who will put you in touch with such an attorney.
Have a Project that needs funding?
Give us a call or send an email.
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