The Solution Beyond the Bank: Accessing Flexible Hedge Fund Debt Capital

In today's commercial real estate (CRE) market, traditional financing often fails to accommodate complex deals, particularly those involving transitional properties, operational businesses, or unique corporate structures. For borrowers and brokers dealing with transactions requiring $8M or more in financing, navigating this gap demands a specialized source of capital.

At Growth Funding Group, we understand that conventional property collateral is often insufficient. That is why we specialize in securing and structuring bespoke financing solutions from powerful credit hedge funds- an essential resource for executing non-traditional deals.

The New Frontier of Collateral: Beyond the Real Estate Asset

The primary utility of a highly flexible credit hedge fund is its ability to look past the property itself and collateralize a loan using other valuable enterprise assets. While conventional banks are rigidly tied to Loan-to-Value (LTV) ratios based solely on bricks and mortar, hedge fund lenders leverage a broader perspective.

These private credit hedge funds can underwrite debt based on:

• Business Operating Performance (EBITDA): For properties that also house an operational business (like hotels, healthcare facilities, or large self-storage centers), the fund may collateralize the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This allows borrowers to achieve significantly higher leverage than a mortgage alone would permit.
• Non-Real Estate Assets: Collateral can extend to machinery, intellectual property, contracts, or even future revenue streams. This flexibility is the core advantage of structured credit hedge funds, as it enables finance solutions for assets that exist outside of traditional lending boxes.

In short, when the property value isn't enough, flexible hedge fund credit strategies allow us to monetize the business's strength and stability.

The Broker’s Advantage: Feasibility, Cost, and Structure

For commercial mortgage brokers, knowing when and how to access hedge fund loans is a competitive advantage. These deals are high-stakes, typically starting at a minimum of $8M, and require a detailed understanding of complex financial structuring.

This is where Growth Funding Group serves as your indispensable partner:

• Quick Feasibility of Execution: We don't waste time. Our experts can quickly evaluate the feasibility of execution for non-traditional deals. We determine whether the business's financials or non-real estate assets are strong enough to support the required leverage.
• Estimating Cost and Structure: The cost and structure of hedge fund debt capital are entirely bespoke, involving customized interest rates, exit fees, and covenants. We provide clear, realistic estimates up front, ensuring transparency for both the broker and the borrower.
• Navigating Complexity: Our experience allows us to bridge the communication gap between the broker/borrower and the sophisticated investment team managing the credit hedge fund.

If you have a challenging deal—a value-add opportunity, a partner buyout, or a transitional property that major banks have declined—leveraging the distinct power of flexible hedge fund loans is often the only path to closing. Partner with Growth Funding Group to transform your complex deal into a fundable transaction.

Contact us today to discuss your client's unique $8M+ financing needs and discover the true utility of specialized credit capital.