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Who to turn to after the banker's refusal
The banks' main focus is always on their existing clients and their portfolios, making it relatively complicated to finance new, riskier operations, confides Damien Giguet, founder and CEO of Shift Capital. The good news is that a plethora of alternative funders is emerging, which in turn address the various categories of risk.
Damien Giguet confirms this escalation is conditionned by the operation's level of risk: "Senior debt funds are able to react to financing from 200 bps and above the Euribor, wich in turn can be classified as core + assets. Moving up the price ladder,some offer hall loans at a higher cost, between 350 and 450 bps, but only yield between 70 and 80% LTV."
“The higher the debt, the more liquidity there is. High-yield debt funds, which require a 6-7% margin on top of fees, clearly have an appetite for the value-add segment but are usually a last resort due to their high cost."