Start with the borrower and its owners
Identify the property-owning entity, its direct and indirect owners, who controls it and who can approve borrowing. Provide the lender with an ownership chart and the governing documents it requests.
Show the sources of the sponsor contribution
The financing plan should identify the capital the sponsor has available, when it will be contributed and whether any part is borrowed. A lender may require evidence of funds and review obligations elsewhere in the ownership structure.
Compare distributions with loan obligations
Model debt service, reserves and required property spending before distributions to owners. An ownership agreement cannot override the restrictions in the loan documents. Review cash-management and distribution provisions together.
Check consent requirements before changing owners
A partner buyout, new ownership arrangement or change in control can require lender consent. Review the proposed change with the lender and transaction counsel before committing to it.
Where sponsor consulting helps
We can model cash flows, compare borrowing alternatives and compile materials for lender review. Our role does not include finding investors, soliciting investment commitments or arranging an equity raise.
Related resources
A partner buyout changes more than the ownership chart
Suppose one owner wants liquidity while the remaining owners plan to keep the property. Start with the amount needed for the buyout, the existing loan payoff, transaction costs and required reserves. Compare that total with the loan the property can support and the cash available from the continuing owners.
Next, examine who will own and control the borrower after the transaction and who will provide any guarantees. A lender may view that borrower differently from the existing group. Model the proposed structure and discuss the relevant changes before treating a refinance as the agreed source of buyout funds.
Make the cash-flow model match the documents
Property cash flow, borrower cash and distributable cash are not always the same amount. Debt service, lender-controlled reserves, capital spending and cash-management requirements can affect what is available to owners. Show those obligations before applying the ownership distribution rules.
Sponsor consulting can organize that analysis into a usable model and decision memo. The work can explain the consequences of an ownership arrangement without sourcing investors or soliciting investment commitments.
Discuss your property financing or explore sponsor consulting.