Hotels and resorts, commercial buildings, shopping centers, and even sports facilities, are projects often funded by joint venture loans. This type of financing is created through an affiliation in which both parties agree to share capital, risks and rewards of the venture. It is different from a partnership in that it relates solely to a particular project, but for the most part, the agreement looks very much like that of a formal partnership.
What investors look for is the potential for profit, which must be clearly outlined in a comprehensive business plan. As a borrower, you will also need to demonstrate that your project has a percentage of the equity invested in cash, or that you have real equity to back up the loan. We encourage you to take a look at our Project Finance section where you will also find some additional information and resources.
We provide 100% joint venture financing that covers all project costs including land acquisition, hard costs and soft costs. There is no interest charged during the term of the investment (typically 3-5 years). Instead, the fund takes a equity position within the proposed project (typically 15%-20%) as compensation for the investment, with the buyout options determined during underwriting.
Investment Criteria
We provide 100% financing for all types of commercial real estate and alternative energy projects. In general, they must meet the following criteria:
* This program is for NEW DEVELOPMENT PROJECTS ONLY that require $10 million or more;
* The project must be shovel-ready--defined as ready to break ground in 90 days or less;
* The project must be sponsored by a experienced developer with a significant financial stake.
Due Diligence Deposit and Equity Participation
As a condition of financing, the investment fund will require a due diligence deposit that is typically 100% refundable and placed with an escrow agent of your choosing. The amount and terms of the deposit will be fully articulated within the LOI. The required equity participation will also be articulated within the LOI, typically 15% - 20%.
