May 10, 2021
The pari passu option is not often discussed or even well-known in
the banking world . What’s more, most lenders – even many SBA
lenders – are not yet aware of the pari passu arrangement. However,
watch this episode to see how to structure these deals to get
higher leverage with a relatively low cost of capital.
What does "pari passu" mean? Pari-passu is a Latin phrase meaning
"equal footing" that describes situations where two or more assets,
securities, creditors, or obligations are equally managed without
preference. This means that a bank can share the first lien on a
real estate asset with the SBA, thus mitigating a lot of their
risk. Therefore, they are more likely to make a loan on the
property.
If you'd like to meet with Beau to talk financing, book a
call here
( http://bookwithbeau.com/ )