Eight Reasons Why Banks are Consenting to C-PACE Financing
Benefits of C-PACE for Banks
Here are a few ways banks are seeing the benefits of C-PACE:
- C-PACE in the capital stack enables banks to continue the lending relationship with valuable clients while maintaining a healthy deposit-to-loan balance.
- For mid-stream development projects that previously penciled but fall short amid tightening conditions, C-PACE fills gaps in the capital stack to get deals back on track.
- C-PACE can be ideal rescue/gap financing and as spreads have come down, it is even more competitive to mezzanine and private debt from bank-competitors.
- C-PACE is non-recourse financing that cannot be accelerated, preserving the bank’s lead position in the event of loan defaults.
- C-PACE financing does not require inter-creditor agreements, keeping administration manageable.
- C-PACE financing is applicable at any time during the property lifecycle ranging from new construction to retroactive financing.
- Escrowing for PACE payments is recommended alongside escrow for insurance and taxes. This helps ensure that the PACE stays current and security position is maintained.
- C-PACE loans can transfer upon sale of a property or be pre-paid at any time.
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