Structured joint venture financing maximizes cash flow potential for the borrower by including the lender as an additional investor in the project. Similar to a partnership, but only for a specific project, a joint venture is a contractual agreement between two or more parties to share in the costs, profits and losses associated with the venture.
A borrower may not initially be searching for a partner in a project, but some recognize the value of a sharing equity in a joint venture over traditional financing. When joining together with additional investors, your business gains a competitive advantage, since it is now able to pursue larger opportunities. An investor should look to partner with a lender who can create value for the project in ways that they can’t. This value can be anything from more effective property management to asset rehabilitation.
Structured joint equity financing requires the sharing of resources, which help companies lower their costs, fuse connections to another company’s technology, boost revenues, increase their customer base or expand product distribution. GCP’s primary focus is to extend these possibilities while lowering the exposure of risk.
This type of loan can be complicated and is not the right choice for all projects, but some projects make more sense as a joint venture. Contact the senior brokers at GCP today to discuss your financing needs and learn if a structured joint venture financing is the right choice for your business.