Capital Traditions Loan Type
Revolving Loan Facility(RLF).
This long term capital facility, normally a commitment of 5 years or more, is designed to help high growth local and regional builders. Builders will no longer need to negotiate individual capital transactions for each purchase. The RLF can be used to fund the equity requirements for all new construction projects as well as predevelopment costs of securing land and obtaining approvals. In addition to project finance, the RLF has the flexibility for use in company acquisitions.
Loans are negotiated on a project by project basis for new construction and allow builders to further leverage their capital while retaining their equity. The Builder is generally expected to contribute 10% of the capital. Loans are secured by a nonrecourse mortgage, subordinated to senior debt facilities. Loans are available at fixed and variable rates, with affordable coupons, and repayment terms up to 5 years.
These financings include the typical layer of mezzanine debt plus fund the Builder’s equity requirement. The Builder is not required to invest their cash in the project. These nonrecourse credit facilities are also for terms up to 5 years, and can be structured with fixed rate or variable rate interest, with a substantial deferral of interest until the project generates cash flow. In certain instances the loan is a subordinate note without a recorded mortgage.
Full Project Financing.
This financing package provides 100% of the funding needed to acquire the property, improve the land, build and sell your homes. The acquisition, development and revolving financing, as well as the capital funds, are provided in one comprehensive commitment. The facility will have a combination of nonrecourse and recourse provisions with typical senior debt security. Pricing is available in a flexible array of fixed and variable interest rates.
Other Products and Services.
Traditions Capital prides itself in flexible and creative solutions to your financing needs. We look forward to discussing the wide range of possibilities including joint ventures, land loans, corporate financing and consulting.