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$$$ Billions Funded In 2023 - Does Your Project Require Funding? Our group had a tremendous year in 2023, debt financing Billions in projects worldwide. If you have a project that requires funding, without giving up equity, please contact me here and I will revert back with my full contact data. Eligible projects include real estate acquisitions with substantial improvements of at least 30% of acquisition price. Also: New construction - Commercial Real Estate of all kinds including Resorts, MultiFamily, Data Centers, Logistic Centers, Casinos, Hotels (must be flagged), and Mixed Use for all Renewable & Alternative Energy including Waste to Energy, Solar Food Production Manufacturing Infrastructure including Rail Lines, Ports, Shipping Funding Internationally with the exclusion of war zones and sanctioned countries This is debt financing for terms of 8-12 years, current note rate is 6-9%, interest only for the term of the loan with balloon payment of balance at end of loan term. Deferred interest payments up to three years. Don’t see your type of project listed? Contact me to learn more.

Debenture project funding is a type of long-term debt financing used to support specific projects or ventures. Debentures are essentially bonds issued by a company to raise capital, typically with a fixed interest rate and maturity date. Here's how debenture project funding works: 1. Issuance: The company issues debentures to investors, who lend money for the project. 2. Terms: Debentures have a fixed interest rate, maturity date, and face value. 3. Security: Debentures may be secured by assets or unsecured. 4. Repayment: The company repays the principal and interest to debenture holders. 5. Project funding: Proceeds from debenture issuance fund the specific project or venture. Types of debentures used for project funding: 1. Redeemable debentures: Repaid at the end of the tenure. 2. Irredeemable debentures: Not repaid, but continue to earn interest. 3. Convertible debentures: Can be converted into equity shares. 4. Non-convertible debentures: Cannot be converted into equity shares. Benefits of debenture project funding: 1. Long-term funding 2. Fixed interest rate 3. Lower cost of capital compared to equity 4. No dilution of ownership 5. Tax benefits (interest expenses are tax-deductible) Debenture project funding is suitable for large-scale projects with predictable cash flows, such as: 1. Infrastructure projects 2. Real estate development 3. Industrial projects 4. Energy projects 5. Transportation projects It's essential to consult with financial and legal experts to determine if debenture project funding is appropriate for your specific project needs and to navigate the issuance process.

Is Technical Debt Worth Your Attention? Technical debt is like financial debt for software development. It allows teams to deliver features quickly but can lead to long-term problems. Just as borrowing money can speed up business operations temporarily, taking shortcuts in development can expedite project delivery. However, like high-interest rates on financial debt, technical debt can incur costs over time. It requires more effort to manage complexity rather than focusing on creating sustainable solutions. While quick delivery of features may create short-term satisfaction, customers may eventually become frustrated with frequent incidents, slow performance, and the inability to add new features efficiently. Therefore, while focusing on external quality can satisfy customers in the short term, neglecting internal quality can lead to long-term dissatisfaction and hinder the software's ability to adapt and grow. Software projects often deal with novel problems, and teams learn about the architecture as they build it. Even the best teams accumulate some "cruft" in their software, but they excel at minimizing and removing it efficiently. They invest time in creating automated tests to catch problems early, refactor frequently to eliminate cruft and use continuous integration to prevent conflicting changes. This approach is akin to cleaning up in a kitchen: while you can't avoid making a mess while cooking, timely cleaning ensures that dirt doesn't accumulate and hinders future tasks. To manage technical debt effectively, organizations should: Agree on its definition: Define technical debt's impact on business, such as increased costs and slower time to market. Treat it as a business issue: Trace ownership to profit and loss statements, linking efforts to strategic priorities. Ensure transparency: Understand technical debt at the application level and classify them based on strategic importance. Formalize decision-making: Establish clear rules and principles to align IT and business priorities. Allocate resources strategically: Link technical debt management efforts to resource allocation decisions and adjust incentives accordingly. Links to ponder upon: https://lnkd.in/gSYswmhQ https://lnkd.in/gvGXpkPH

Debt vs. Equity Financing: A Symbiotic Relationship in Real Estate Development When it comes to financing real estate projects, both debt and equity play crucial roles, often working together to ensure the project's success. Though they differ in structure, they share common goals, and when managed effectively, they create a balanced financing solution. Debt financing offers leverage, allowing developers to access capital without diluting ownership. The predictability of interest payments enables detailed cash flow planning. However, it also comes with repayment schedules and covenants that must be met, regardless of the project's performance. On the other hand, equity financing provides flexibility. Investors typically expect higher returns but take on more risk, as they only see returns after debt obligations are fulfilled. As a result, equity holders often prioritize long-term value and may have a stronger influence on project decisions. While these two forms of financing might seem at odds, their relationship is highly symbiotic. A well-structured financing model balances debt and equity, maximizing returns while minimizing risk for both investors and developers. When it comes to risk mitigation, this is where the alignment between debt and equity becomes apparent. Construction projects are inherently risky, but both developers and lenders look to "de-risk" where possible. This can be achieved by hiring the right professional team (an experienced site manager or contractor can make all the difference!) or conducting thorough survey reports before development begins. When studying real estate investment, equity finance is often portrayed as the 'exciting' side of the business, but in reality, debt financing is essential for 99% of developments. Some of the most remarkable projects are driven by innovative debt strategies. So what do you think? Is debt the new equity? #RealEstateFinance #DebtAndEquity #RiskMitigation #RealEstateDevelopment #Finance #Investing #CRE #RiskManagement #DebtFunding #EquityInvestments

Technical debt is an inevitable part of digital transformation, but it doesn't have to be a setback. By shifting to a strategic technical debt approach, organizations can pave the way for sustainable innovation and growth. In this article, we explore how intentional planning and proactive management of technical debt can transform it from a challenge into an opportunity: https://lnkd.in/gsBApjJV [ID: Slide 1 A bold title slide with the CAI logo and the slogan "We power the possible™" at the top, introducing the topic "Application Development and Maintenance: Shifting from accidental accrual to a strategic technical debt approach." Slide 2 The slide highlights the first step in managing technical debt, with a statement about the importance of taking stock of existing technical debt to plan for additional costs, accompanied by the CAI logo and slogan. Slide 3 A minimalist slide that emphasizes the need to find a balance between paying off existing technical debt and incurring new debt, featuring the CAI logo and slogan. Slide 4 This slide focuses on understanding the workload of technical teams, suggesting time should be spent on comprehending team structure, completion times, and existing workloads, with the CAI logo and slogan present. Slide 5 The slide advises on strategic hiring, proposing to include resources with both legacy knowledge and new approaches, and to balance their workload, showcased alongside the CAI logo and slogan. Slide 6 A slide presenting considerations for incurring proposed technical debt, such as organizational gains, future challenges, immediate issue resolution, and future advanced capabilities, all beneath the CAI logo and slogan. Slide 7 The final content slide features a call to action for making actionable plans to pay off debts and prioritize maintenance, integrating it into daily operations, complemented by the CAI logo and slogan. Slide 8 A closing slide with the CAI logo, the slogan, and a call to action to learn more at the CAI website, along with a series of unselected bullet points and numeric codes at the bottom.}

𝗣𝗲𝗰𝗸𝗶𝗻𝗴 𝗢𝗿𝗱𝗲𝗿 𝗧𝗵𝗲𝗼𝗿𝘆 "𝗠𝗮𝗻𝗮𝗴𝗲𝗿𝘀 𝗳𝗼𝗹𝗹𝗼𝘄 𝗮 𝗵𝗶𝗲𝗿𝗮𝗿𝗰𝗵𝘆 𝘄𝗵𝗲𝗻 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗶𝗻𝗴 𝘀𝗼𝘂𝗿𝗰𝗲𝘀 𝗼𝗳 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴" The Pecking Order Theory, also known as the Pecking Order Model, relates to a company’s capital structure. Made popular by Stewart Myers and Nicolas Majluf in 1984, the theory states that managers follow a hierarchy when considering sources of financing. The pecking order theory states that managers display the following preference of sources to fund investment opportunities: first, through the company’s retained earnings, followed by debt, and choosing equity financing as a last resort. Understanding the Pecking Order Theory The text explains the pecking order theory, a concept used by companies to decide how to finance their projects. Due to unequal information (asymmetric information), companies have an advantage over investors. To compensate for this risk, investors demand a higher return on external financing (debt or equity) compared to internal financing (using retained earnings). Since internal financing minimizes information asymmetry, it's the cheapest option. When external financing is needed, debt is preferred because it's cheaper than equity. Issuing debt can signal confidence in the investment, while issuing equity might suggest the stock is overvalued. The pecking order goes: 1. Retained earnings (internal financing) 2. Debt (external financing) 3. Equity (external financing) This order helps companies choose the most cost-effective way to finance their projects. 𝐄𝐱𝐚𝐦𝐩𝐥𝐞: The cost to shareholders for each of the three options: Option 1: If management finances the project directly through retained earnings, the cost is $10 million. Option 2: If management finances the project through debt issuance, the one-year debt would cost $10.8 million ($10 x 1.08 = $10.8). Discounting it back one year with the management’s fair rate would yield a cost of $10.09 million ($10.8 / 1.07 = $10.09 million). Option 3: If management finances the project through equity issuance, to raise $10 million, the company would need to sell 200,000 shares ($53.77 x 0.93 = $50, $10,000,000 / $50 = 200,000 shares). The true value of the shares would be $10.75 million ($53.77 x 200,000 shares = $10.75 million). Therefore, the cost would be $10.75 million.   As illustrated, management should first finance the project through retained earnings, second through debt, and lastly through equity. Follow me, Rishabh Sachan, for an insightful journey into the world of finance and to stay updated on enriching financial content, and feel free to connect. #finance #investing #financialwisdom #personalfinance #wealthcreation #stockmarket #linkedin #linkedinforcreators

Have you thought about adding CPACE to your Capital Stack? Let’s compare Mezzanine debt with C-PACE financing: Mezzanine Debt: Duration: Typically spans three to five years. Interest Rates: Usually between 10% and 14%, or even higher. Payment Structure: Requires monthly payments by borrowers and a balloon payment of interest. Recourse: Borrowers are personally liable. Purpose: Often used for real estate projects. Flexibility: Limited flexibility in terms of repayment and duration.   C-PACE Financing (Commercial Property Assessed Clean Energy): Duration: Available for up to 30 years. Interest Rates: Generally starts at low/mid 7%. Payment Structure: Paid annually or semi-annually, and can be delayed for up to Three years. Recourse: Typically non-recourse, meaning it attaches to the property itself. Purpose: Funds construction projects that meet minimum requirements. Benefits: Reduces capital costs, offers longer-term solutions, and allows pass-through of payments to tenants or guests. In summary, C-PACE financing provides a more flexible, longer-term, and cost-effective alternative to mezzanine debt. It attached to the property rather than the borrower, making it an attractive option for various industries. 

When designing a capital Sources & Uses table for #commercialrealestate project, I use a specific convention that is applicable to virtually every project type. First, there's the table's vertical orientation. I break Uses and Source down into 6 subcomponents each. Most of the time, two or more of these subcomponents will be irrelevant, and they can be hidden or shown as a zero value. Uses: I separate Land from Hard Costs (HC) because Land is not depreciable, whereas HC (generally) are. Although I've found in many models Finance Costs (FC) are often subsumed within Soft Costs (SC), I think it is essential to construe them separately because FC will generally be lower or zero in an Unlevered Analysis (a project financed without debt), and it should be obvious to someone studying the deal how costs are derived in both a levered and unlevered scenario. Moreover, I separate Operating Losses (OL) from SC because OL relate to the revenue model of the enterprise, whereas SC relate to those activities required to bring the project to a physical state where it can generate revenue in the first place. Lastly, I have a category for Income Offsets, which represent any cost that can be paid for using income generated from the project. Sometimes this value is quite large--such as in the case of a multi-phase project in which certain buildings that are constructed and deployed in early phases generate revenue to defray subsequent phases' costs. Sources: I start with Senior Property Debt to indicate what is typically the largest source of capital for a project. I show Junior Property Debt discretely to let the viewer know the capital stack has two (or more) loans with liens against the property itself in hierarchical positions. I then represent Mezzanine Debt separately from *property* debt, as mezz is not secured by a lien on the property, because it is technically a form of preferred equity, i.e. it is always junior to property debt. I then show Cash Equity which comprised other (lower priority) preferred equity and common equity, followed by Grants which are a form of equity on the project's balance sheet, albeit without rights to participate in future cash flows; grant funds simply inure benefit to real equity participants by reducing the amount of capital required to achieve the same value product. We finally see Income Offsets yet again--this value will be non-zero in the event the analyst decides to indeed construe them as a Source of capital, in which case Income Offsets in the Uses section would equal zero. This is pure optics, but choosing to represent Income Offsets as a Source will make the project's total capital needs appear larger, albeit the stack committed by debt, equity, and grants will remain the same. Tomorrow, I'll discuss the horizontal orientation of this table, why it is key to show three different cost representations, and more! #CRE #financialmodeling #forecasting #realestatedevelopment

Private debt is playing an increasingly crucial role in infrastructure financing as traditional commercial banks face heightened regulatory pressures. Companies like Ares Management Corporation and Brookfield Asset Management are leading the charge, with infrastructure debt attracting substantial interest due to its stable returns. As global demand for both traditional and digital infrastructure rises, private debt funds are poised to capture new opportunities in these essential sectors, further diversifying their capital sources. https://lnkd.in/dWG4-tTn #PrivateDebt #PrivateCredit