Participating mortgage is a creative business financing alternative.
Participating mortgage financing is a unique alternative for obtaining the capital your business needs. It is a loan which contains clauses and conditions under which the lender participates, or shares in the revenues of the property. The level of participation may be calculated from the gross receipts, net operating income, net income or net cash flows of the property.
A participating mortgage gives a lender more incentive to give the loan if they lend to a business with good potential. Just like with a more standard mortgage loan the lender will need a good plan to verify the business model. They want to make sure you know a lot about your industry so they can see where the income will come from.
Another commonly used name for these commercial mortgage loans is “kickers”. They provide the following:
• The lender with an effective tool to spread, and thus reduce risk
• The lender with additional incentive to make your loan
• The lender with a more flexible means of structuring your loan
• The business with another way to obtain financing
We have a directory which contains over 4,000 sources of business capital, and we can provide for you a matched list of commercial real estate lenders for free if you tell us a little bit about your business, and the needs of your business. Our business funding directory is the largest of its kind in the USA.