is one of the most important capital formation activities and needs to be
carefully considered by the development sponsor/project owner as
each capital finance plan only gets one bite at the apple with each specific
funding source the capital finance plan is submitted to for underwriting
consideration. Rainmaker Underwriting's
approach to developing capital finance plans focuses on the following key
due diligence issues:
proposal must be specifically targeted in accordance with the specific
underwriting preferences of a given funding source; and
proposal must specifically address a capital funding structure and the
proposed funding product that is essentially similar to those funding
products the funding source routinely offers or accepts for investment
proposal material representations of fact must be backed by the high level
due diligence documents that provide the basis for these factual
representations and are ready for immediate transmittal to the funding
source upon demand; and
proposal sponsor must be ready to answer all of the questions the funding
source's representative will pose pertaining to the market, finance and
business particulars surrounding the use of funds for which the proposal is
made, at the time of the initial application telephone teleconference with
the funding source's representative.
mistakes and very
common misconceptions regarding the business funding process - especially
where the funding is intended to be used for the development and construction of
commercial income-producing properties - that result in routine rejections,
frustration for the sponsor/borrower and the funding source underwriting team,
and the inevitable loss of application fees. These mistakes and
misconceptions are almost 100% the fault of the sponsor/borrower because they
don't understand the process, they don't understand the commercial credit market
business model, they refuse to accept their responsibility for providing the due
diligence documents required for underwriting - in the form and substance the
funder requires - when the underwriting team requests production of these
documents. The result is that more than 4 out of 5 companies seeking
funding for their business fail to obtain the funding they are seeking.
than 4 out of 5...
are daunting odds and speak to the need for a better understanding of what is
actually going to be required for a successful outcome to be an actual
probability, rather than a remote possibility.
before you stroke that check to the broker, lender, banker or funding group, you
would do well to consider the odds and the idea of having someone who actually
understands the process, understands the underwriting requirements of that
particular funding source and understands what needs to be represented in your
funding proposal, help you throughout the process so that you can maximize your
opportunity for a successful outcome.
where Rainmaker Underwriting comes into play with our unique business model for
construct your funding proposal based upon the key underwriting points and
issues the underwriters for the funding source being solicited wants to see
in a transaction.
construct your funding proposal based upon the due diligence elements
supporting that proposal so that the propensity for materially-significant
misrepresentations of fact do not occur.
review and assist the client with the initial application process, by
coaching them on the key transaction issues they will have to present, how
they should present them and what information needs to be presented in the
application to optimize their chance of taking the project forward into
assist the client with their compliance responsibilities regarding the
production of the required due diligence documents to ensure they are ready
when requested, have the form the underwriter requires and have the content
the underwriter requires so that the propensity for the underwriting process
to get snagged on this issue is minimized to the greatest extent possible.
review and comment on all communications and continuously consult with the
client and the client's project team to ensure that all underwriting issues
and comments are disposed of in a timely and professional manner so that the
propensity for communications to break down (and the application be
ultimately abandoned and rejected in underwriting) is minimized to the
greatest extent possible.
review and comment on the business deal and economic impact of all contracts
pertaining to all materially-significant consultants, services providers,
vendors and contractors involved in the project development program to help
ensure these proposed negotiations end with contracts that will in fact have
the highest possible propensity for meeting the commercial underwriting
standards that will be applied to these matters.
review and comment on all programs pertaining to the administrative
reporting and management functions to help ensure the funding group is not
exposed to the prospect of an administrative foreclosure that would
dramatically reduce the funding source's ability to profit from the
transaction (and therefore, result in an application rejection).
provide specialized follow-on services for the pre-construction and
construction phases of the development of a commercial-income producing
property as this is where our strengths lie.
provide free referrals to investment groups, funding sources, brokers and
bankers for the proposed business based upon the unique issues of that
business proposal and the funding product for which the sponsor is seeking
to us and learn about all of the solutions we offer to help with the entirety of
the funding cycle. Rainmaker Underwriting has the knowledge, tools and
methodologies that can add real value to your business or project.
do projects fail to get funding approved?
Rainmaker has had extensive
discussions through the years with clients who are seeking funding for
their commercial income-producing property development and construction
program, but have, so far failed to do so. Rainmaker has also had
extensive discussions with intermediaries, investment bankers, lenders,
investors and underwriters to get their side of the story. The
interesting thing is that the same five (5) things seem to come up again
and again that end up leading to a total failure. Are you destined
to fail? Can you afford to take the risk of blowing out even a
single funding source, knowing that source could be the one source you
needed to succeed? What can you do to avoid these terrible
mistakes that always lead to a rejection? Click
here and learn more.