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Looking for a mezzanine loan? Ocean Pacific Capital is a leader in providing all types of mezzanine programs. Whether mezzanine purchase, mezzanine refinance, or mezzanine construction, our mezzanine department offers a wide variety of options. Particularly in today's tight senior debt market, mezzanine is an increasingly important capital option for growing companies. We provide mezzanine financing from $500,000.00 to $1,300,000,000.00. If you are looking for a commercial mezzanine conduit, or construction mezzanine financing in California, or any other state, with good or bad credit, we can help you find the mezzanine program that meets your unique and individual needs.

A mezzanine loan is a relatively large, unsecured loan (a loan that is not backed by a pledging of assets) with a maturity of at least five years. The loan carries a detachable warrant (the right to purchase a certain number of shares of stock or bonds at a given price for a certain period of time) or a similar mechanism to allow the lender to share in the future success of the business. Mezzanine loans are dependent on cash flow for repayment.

Mezzanine loans are similar to commercial second mortgages, except that mezzanine loans are secured by a percentage of ownership of the project, a 2nd T.D. that owns the property, as opposed to the real estate. If the company fails to make the payments, the mezzanine lender can foreclose on the stock in a matter of a few weeks. If you own the company that owns the property, you control the property. Therefore, a mezzanine loan is secured by the stock of a company, which is personal property and can be seized much faster. Mezzanine loans are large. It is hard to find a mezzanine lender who will thoroughly read through all of the required paperwork for a loan of less than $5 million. Typically, mezzanine lenders typically prefer big projects.

Furthermore, a mezzanine loan, as John C. Murray explains in his article entitled "The Mezzanine Financing Endorsement," is "a result of the increased securitization of real estate and the packaging of pools of loans for sale into the secondary market, mezzanine financing has become very popular in recent years. Mezzanine financing (or, perhaps more appropriately, mezzanine capital) fills the gap between the first mortgage financing, which usually has a loan-to-value ratio of forty to seventy-five percent, and the equity participation of the principals of the borrower, which is usually no more than ten percent of the cost of the project. Mezzanine financing commonly supplies financing of ten percent to fifty percent of the project's capital structure cost. This type of financing can take several forms. Most commonly, it involves extending credit to the partners or other equity holders of a borrower and taking a pledge of such parties' equity interests (including the right to distributions of income). Alternatively, the lender may take a preferred equity position, which is entitled to distributions of excess cash flow after debt service, ahead of the borrower's principals. A "combination" loan structure may also be used to combine a first mortgage loan with mezzanine financing at an aggregate loan-to-value ratio of ninety to ninety-five percent. This type of structure may contain a shared appreciation or contingent feature, an exit fee paid by the borrower, or sometimes, both. The borrower in a mezzanine loan is often an LLC, and the equity participant in the borrowing entity is frequently itself an LLC. In those situations where the mezzanine lender is taking a pledge of some or all of the equity interests in one or more of these entities in connection with the mezzanine loan, the lender may look to the title insurer for special forms of title-insurance coverage. The lender may seek some form of non- imputation coverage, i.e., assurance that the title insurer will not deny coverage under the owner's policy based on matters known to the borrowing entity (or its members) being imputed to the lender. Copies of endorsements offering this type of coverage are attached hereto. Title underwriters may require an affidavit and an indemnity agreement from the existing LLC members, and from the mezzanine lender when it exercises its foreclosure rights under the pledge and succeeds to an ownership interest in the mezzanine borrower. These affidavits and indemnity agreements will state that the respective parties have no knowledge of any fact that will affect the coverage under the policy, and will hold the title insurer harmless for losses resulting from its reliance on such affidavits and indemnities. The title insurer may also require, and review, financial statements from all relevant parties in order to achieve a comfort level for relying on the aforementioned indemnity. The attached endorsements state that (as agreed to by the insured and its equity members) all payments for loss under the policy will go directly to the mezzanine lender, and that there will be no denial of coverage as the result of the transfer of any of the LLC membership interests to the mezzanine lender. The endorsements further provide that the title insurer waives its right of subrogation and indemnity against any of the insured owner's equity owners until the mezzanine loan is paid in full. If a loss occurs under the policy, the amount paid by the title insurer is limited to the actual loss less a percentage thereof equal to the percentage of LLC membership interests not owned by the mezzanine lender at such time. If the loss occurs before the mezzanine lender's acquisition of the insured owner's membership interests, the mezzanine lender is not required first to pursue its remedies against other collateral. However, the title insurer's liability in any event is limited to the amount of the mezzanine loan, and the title insurer is entitled to credit for any amount paid out under a simultaneous loan policy. The title insurer is also entitled to reimbursement from payments received by the mezzanine lender from other security. The term "mezzanine lender" can be defined to include the owner of the mezzanine loan and each successor in interest in ownership of the mezzanine loan, and include any subsidiary or affiliate entity of the owner of the mezzanine loan. The availability and content of the attached endorsements will vary depending on factual and underwriting considerations, as well as statutory and regulatory restraints in certain states." Mezzanine lenders and commercial mezzanine construction lenders await our clients' application for a mezzanine loan, a multifamily or apartment construction loan, a commercial construction loan, a condo, or residential subdivision construction loan, or a land development loan.

Click here to apply now or for more information, and our recent closings, please visit our commercial loans page.

Whatever your financing needs,
we will tailor a loan that's right for you.

 


Daily Oil & Gas and Wall Street Journal News
1/20/20

SNC-Lavalin Wins UAE Haliba Field Contract
Posted on Sunday January 19, 2020

Execs from the Al Dhafra joint venture commemorate first oil from the Haliba field in this ADNOC photo from July 2019. PHOTO SOURCE: ADNOC

OPEC, IEA or EIA Completely Wrong in 2020 Oil Market Analysis
Posted on Sunday January 19, 2020

Somebody big has got their analysis of the 2020 oil market flat wrong.

Libya Oil Production Plunges
Posted on Sunday January 19, 2020

Libya's eastern warlord kept virtually all of the nation's oil fields shut in a show of defiance after world leaders failed to persuade him to sign a peace deal.

Panhandle Appoints New CEO
Posted on Sunday January 19, 2020

Panhandle Oil and Gas Inc. has revealed that Chad L. Stephens has been approved as the new chief executive officer of the company.

Global Exploration Poised for Upswing
Posted on Sunday January 19, 2020

Global exploration is poised for an upswing as operators flock to licensing rounds, according to Rystad Energy.

Snake Oil Goes Mainstream
Posted on Sunday January 19, 2020

An obscure part of the global marine-fuel market, once viewed as having little value for most shippers, is about to have its day.

Oil Up After Unrest Hits Key OPEC Producers
Posted on Sunday January 19, 2020

Oil jumped back above $65 a barrel as supply disruptions in Iraq and Libya reignited concerns over the market's vulnerability to geopolitical risk in key production regions.

Oil Prices Nearly Flat for the Week
Posted on Thursday January 16, 2020

WTI and Brent crude oil futures posted small gains Friday but are down slightly for the week.

McDermott Hits Freeport LNG Milestone
Posted on Thursday January 16, 2020

Train 2 at Freeport LNG has begun commercial operations, engineering and construction contractor McDermott reported Friday.

US Adds 15 Oil, Gas Rigs
Posted on Thursday January 16, 2020

The U.S. rig count increased for the first time this year as the nation added 14 oil rigs and one gas rig.

Wall Street Journal
Commercial News

1/20/20

WSJ.com: US Business

Hospitals Give Tech Giants Access to Detailed Medical Records
It isn?t only Google that can tap into patients? digital health records: Microsoft and IBM also have signed agreements with major hospital systems giving them the ability to access patients? identifiable data.

Google Pushes 'Sensible' Ideas for How to Regulate AI
Silicon Valley executives and lobbyists like to say they embrace regulation. Now they?re launching a frenzy of lobbying on what they want that regulation to be?and Europe is set to be one of the first battlegrounds.

Sears Woes Hit Hometown Stores
Since Eddie Lampert acquired the chain, store owners have struggled to get products and compete with lower prices from sears.com, causing some to consider leaving their contracts.

Americans Show Scant Interest in Electric Vehicles, Subaru CEO Says
The CEO of Subaru expressed frustration over trying to navigate between environmental regulations that seek to expand use of electric vehicles and the lack of real consumer demand for them.

China Tries to Stem the Flow of Its Plastic Waste
China is cracking down on the plastic waste that stems from food-delivery containers as well as packaging for e-commerce. Waste from parcels was responsible for 93% of 2018?s growth in trash in China?s largest cities, one study found.

IMF Predicts Global Economy Will Rebound in 2020
The IMF expects global gross domestic product will expand by 3.3% in 2020, up from 2.9% in 2019.

Foreign Investment Falls to Near-Decade Low as Globalization Slows
New overseas investment by businesses around the world fell for the fourth-straight year in 2019 to its lowest level in almost a decade, pointing to a slowdown in globalization as the world-wide economy cooled.

BRE #:00619059
Charles Elfsten, President
Charles A. Elfsten
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