New construction financing for CRE projects and financing for small businesses it a tough slog. Historically, your odds of success are only 1 in 5.55 – that’s considerably worse than the odds of breaking even on $5 scratch-off lottery tickets here in Texas (note graphic below showing odds of 1 in 3.85 for my brother-in-law’s current favorite game and he hasn’t hit the jackpot in 30 years). Moral of the story? Apply for all the loans you want and keep running to those “investor meetings” if you think that could work for you. Odds are you would have done better perhaps playing the lottery.
So, how do you obtain high LTV CRE new construction financing on a non-recourse basis and manage to have the odds ever in your favor?
The Probability of Success
The capital financing approach with the highest probability of success is the IPO (about 1 in 1.34). The catch to the IPO is that it takes – on average – more than $3 million and 11 months to launch an IPO. The cost and time requirement are chief reasons why less than 3% of American businesses are publicly-traded. So, if you don’t have $3 million and don’t want to fund your project or business using your potential winnings from playing the lottery, how do you change the odds to be ever in your favor?
Public Capital Markets Access for Everyone Else
The recent change in the securities regulations now provide the means to change those long odds of success to as good as potentially 1 in 2.77 or even lower due to the combination of advertising rule changes and process rule changes that create the opportunity to have the odds ever in your favor. Surety you crave? I give you none because it does not exist. It’s all a function of advertising scope, reach and frequency that contribute to a probability of success of up to 96% for the prototype 22-week public offering campaign that is possible due to the changes in Regulation A. Leverage up to $75 million in at-risk equity capital contributions by using this process and our licensed program. You just have to do it by the numbers.
Now that you know, may the odds ever be in your favor.