The Net Worth Financing Requirement
I'm looking at developing a million+ project, our net worth is good but not as high as the project's loan amount. Has anyone found it possible to get financing beyond their net worth without a partner (as an individual investor)? Would mezzanine be the best option to secure lending?
[{"id": "cxural3", "text": "Depends on the financing, but first timers might need at least 30-40% of the loan amount in terms of net worth of the guarantor, etc.  When you say \"Our\" is that the development entity or the husband/wife team - just keep in mind the requirements vary by program and who is identified as KP or person with significant control's financial capacity. ", "replies": [{"id": "cydhcz0", "text": "It's not so much net worth,  but liquidity.....lenders want comfort knowing you can support the debt should a hiccup occur.   Lenders are getting more strict about liquidity, especially now with the new regs.  Talk candidly with a lender.....", "replies": [], "depth": 2}], "depth": 1}, {"id": "cxut2a6", "text": "The answer is yes it is possible, and no it does not always require mezzanine financing.  Specifics depend on each lender/product.  May be helpful for you to chat with an experienced capital markets guy.\n\nAnd I mean experienced, there are so many charlatan debt brokers out there.", "replies": [], "depth": 1}]