Specialty Lenders Thrive in a Challenging Economy
Monday, July 14th, 2008Michael Stoler of the New York Sun has written an article about our industry. (HT: The Dirt Lawyer)
Mr. Stoler accurately states that for new or inexperienced developers the sources of capital are few and far between. He writes:
“The answer for a growing number of these borrowers is alternative, or specialty, lenders that provide financing at higher rates and with stricter conditions.”
Still Lending
While the credit crunch has decreased the supply of funds, specialty lenders are still willing to lend on the right deal. Specialty lenders can be hard money lenders or hedge funds.
In order to obtain a loan from these specialty lenders, borrowers should have lots of cash and a solid project grounded in reality, not the past boom market. Mezzanine lenders and joint venture funds help borrowers with limited cash acquire the necessary equity to gain financing.
Borrowers should expect a rate in the double digits and higher fees to pay for the speed that specialty lenders provide.
If you need specialty financing, please feel free to call me at (925) 280-5388.