DISTRESSED DEBT FINANCING
A10 provides flexible and timely funding to small and medium sized investors acquiring distressed debt secured by commercial real estate. A10 has deep experience in dealing with a variety of distressed debt transactions dating back to the late 1980s and Resolution Trust Corporation (RTC).
TYPICAL DISTRESSED DEBT SITUATIONS FINANCED
- Single loan purchases
- Small loan pool purchases
- One-off purchases
- Buy – Resell. Transactions in which the distressed debt buyer looks to buy loan at cheap price and eventually sell the loan to another lender at a higher price
- Buy – Liquidate. Transactions in which the distressed debt buyer looks to quickly foreclose and sell underlying commercial property
- Buy – Hold. Transactions in which the distressed debt buyer looks to quickly foreclose and own and operate the underlying commercial property for investment purposes
DISTRESSED DEBT FINANCING TERMS
- Advance Rate: Up to 65% of the loan acquisition cost
- Financing Amount: $500,000 to $10 million (per loan)
- Pricing: Rates and fees adjusted for risk and leverage
- Term: 1-5 years (preferred term is 2-3 years)
- Future Funding: for lease-up costs and earn-outs
- Eligible Loan Types: Commercial real estate secured
- Recourse: Non-recourse available based on property and loan characteristics
- Timing: A10 usually works simultaneously with its clients during the loan sale process to ensure there is sufficient time to close once an agreement to buy the debt has been reached
BENEFITS OF A10'S DISTRESSED DEBT FINANCING
- Non-recourse option available at lower advances
- Speed
- Highly experienced team to assist in closing complicated distressed debt transactions
- Focus on single loan and small loan pool purchases
- A10's distressed debt financing provides investors capital to acquire more debt assets and to leverage returns