•The strength of this program is its simplicity and its’ cash on cash return to the borrower.  Moreover, the Commercial Lender is provided the additional collateral needed to secure the loan.  Consider the following example of a project that requires approximately $25,000,000 in net funding.  This example assumes an interest rate of 9.3%, a ten year term, and a 50% tax bracket (two dollars of profit to cover payments on principal)

 

Credit Enhancement Program Standard Commercial Loan

Debt Service $450,581    Debt Service $318,296

Principal/Term Paid at Close            Principal/Term $25,000,000 (x2)

Interest/Term $54,069,767         Interest/Term $13,195,502

Profit Required to Service Debt           Profit Required to Service Debt

               $54,069,767                                             $63,195,502

 

 

 

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