I have an interested party to become a junior partner on a historical condo conversion. They would make the loan for 1.4 million and I would have a 2 year term to complete the project. I think this will limit my ability to have other lenders on other projects until I pay off the loan. What will it mean to my company to do this? What are the pros and cons? Your answers will have an impact on the decison I make. Please help, Thanks!!!
So is there such thing? They what to use a junior partner to secure a loan and when I payback the loan they are out of my company. What does this mean? Is this good bad or limiting? Thanks
You don’t mention what type of company you have, is it a c-corp, s-corp, llc, partnership? This proposed junior partner, are they just a money-guy or do they offer some expertise that is needed to complete the project? What type of return are they looking for, just interest on their $1.4m or equity participation in the deal? If just interest why not have a simple loan relationship where you pay them interest but do not bring them into your company. This would simplify the relationship.