balmain + advisory + do you need equity?
Do you need equity?
The term equity’ refers to the portion that is required to be contributed by the owner’ of an asset, and yes... you can borrow it.
There are generally two types of equity lenders: passive or participating. Typically, Passive lenders offer equity at a set percentage and take minimal participation in regard to performance risk. On the other hand, Participating lenders, who provide equity participation loans to a transaction will often underpin their pricing via an active involvement in the transaction and performance of the property. Put simply, the lender participates in the income or cash flow from the property, where the rate of return depends on the performance of the property and the time a transaction takes to reach its break-even point.
More often than not, equity lenders will be involved in the entire process of a transaction. They will be actively involved in the structure of both the commercial and financial terms. This is the function that is performed by Balmain Advisory. Mandated by the borrowing party to source all funds and provide structuring advice to transactions, Balmain coordinates the entire process on behalf of the borrower and acts as an arms-length-mediator with all lenders; debt, equity or other. Balmain services the borrower by providing sound advice on the optimal commercial and financial structure of a transaction.
The rate charged and level of participation by equity lenders is highly negotiable and there is no standard way of structuring these types of transactions. Motivations for each lender and borrower vary significantly from transaction to transaction. Balmain’s role is to match the motivations between all parties for the most optimal outcome and includes the following:
- Structuring a potential transaction in a form suitable for distribution to potential lenders (in all categories).
- Sourcing the most suitable lenders for the transaction.
- Negotiating terms and conditions on behalf of borrowers with all lending parties.
- Managing the entire transaction pre- and post-settlement.
- Providing introductions of all third parties and consultants that may be required for the transaction.
Balmain has vast experience in this role, with access to over 30 equity lenders, ranging from Passive to highly experienced and specialised Participating lenders. To understand more about how Balmain can help you call Balmain today on 02 9232 8888.
balmain + advisory + do you need equity?
quick contact