The first question many sponsors ask is simple: what’s the rate? It is an understandable question and almost always the wrong place to start.
Why a quote on day one is not useful
A rate is the output of an underwriting process, not an input. It depends on the collateral, the sponsor’s equity and liquidity, the business plan, the market and the structure of the capital stack. Until those are understood, any number is a guess.
Typically, you will not get a quote on a rate or a structure until 30 days down the path. It’s just not going to happen.
Laurent Ronald Gray, Chairman, CEO and Co-Founder
Structure decides the money
The terms a sponsor receives are shaped by how the transaction is prepared and presented. A well organized package, with the story, the numbers and the documentation aligned, gives capital providers confidence to compete on terms.
Structure is what dictates the kind of money that you get and how you get the money.
Justin Madoff, Chief Operating Officer
A disorganized approach does the opposite. Missing documents, inconsistent projections and open questions slow a lender down and push pricing up to cover the uncertainty.
The questions that come first
Before discussing pricing, we want to understand the fundamentals. Do you control the land? What is your equity position and liquidity? What studies have been done? What are your expectations, and where did they come from? Answering those questions honestly is what makes a competitive rate possible later.
Contact us to start with the questions that matter.