Commercial projects are everywhere, but they aren’t necessarily the same. They can be SPE’s (special purpose entities) or those without previous business or records. Commercial projects run the gamut in the type of the project and the cost. Developers, Project management companies, and general contractors sit at the helm of every commercial project, planning, guiding, and executing the project from conception to completion.
The debt and repayment structure in commercial project loans are unique. The structure designated as recourse and non-recourse determines the sponsor’s liability for repaying the loan if the project’s cash flow doesn’t support the debt’s servicing. Suppose the debt is structured as a recourse. In that case, the sponsor maintains liability for the debts and is responsible for paying when the project’s cash flow is incapable of servicing the debt. Non-recourse structured debt financing alleviates the sponsor from future liability if the project’s cash flow cannot service the debt.
These are just a few of the considerations involved with financing a commercial project. Unless there is a CPA after your name, run, don’t walk to the experts. Our K-WAM’s professionals can match your commercial project loan needs to the right product and supplier with the click of a mouse. For additional information, send a message to our team, Click here.