Picture this: you’ve got your eye set on a piece of commercial real estate in a developing, foreign market. The timing is perfect, demand for your planned project is high, and you expect a huge return on investment. The only problem? You can’t obtain financing.
Obtaining the needed funds to start your project in up and coming economies, such as Jamaica, can be a tough sell. Conventional lenders are notoriously risk-averse; they want to invest in a sure thing and even alternative sources of financing often fail to see the future value of a commercial real estate project in, say, the Caribbean or South America.
“Inexperience and a lack of knowledge regarding developing foreign economies can sometimes blind lenders to the value proposition of a good commercial real estate project,” said Kevin Wolfer, CEO of Kennedy Funding. “Kennedy’s experience in lending in foreign markets has made us a leader in closing these types of international loans.”
If you have an opportunity abroad that needs funding and you’re ready to pull the trigger quickly, a direct private lender like Kennedy Funding could be precisely the lending partner you need.
Borrowing money for an international project
Lenders who fund international projects must, first and foremost, demonstrate an understanding of the local regulations. Approval processes differ greatly from place to place, and the rules about how a lender can foreclose on delinquent properties vary widely as well. Moreover, U.S.-based lenders cannot easily access the property in person, left to trust the reports of their borrowers and public records.
Another major challenge in convincing stateside lenders to fund an international project is contending with local government laws or corruption. In many countries, particularly developing economies, there is a high risk for lenders; sometimes due to the difficulty in appraising land values or other challenges. Those lenders that do not have established, trusted networks in the region will be hesitant to make inroads for the sake of a single commercial real estate project.
For many lenders, these uncertainties could be enough to lead them to simply avoid viable international projects. An inexperienced lender might be more hesitant to close a loan, while one more familiar with the lay of the land will have a clear understanding of how the process should look. To boost the chances of approval, borrowers should seek out lenders with the experience necessary to make them feel comfortable extending funds to the project.
Lender bias against developing foreign economies
While many conventional lenders, such as banks, are often too conservative to even consider dealing with territory outside their usual sphere of operations, even private lenders sometimes exhibit bias toward historically-challenged but currently developing economies. While direct private lenders like Kennedy Funding have far more flexibility than banks and other conventional lenders, that doesn’t mean they will always commit to a loan. This is especially true if they view the target market as volatile, unpredictable, or unfamiliar.
While the reduced access to capital in these markets could be discouraging at first, it also creates additional opportunity for the motivated borrower. Direct private lenders that will extend financing to valuable international projects, like Kennedy Funding, grant borrowers access to underserved economies that are poised for big growth and development. Partnering with the right lender means access to a vast network of trusted appraisers, government officials, attorneys and other experts, not to mention a fluency in local regulatory frameworks.
Kennedy Funding is a leader in international lending
Luckily, Kennedy Funding is a leader in international lending, especially throughout the Caribbean, Canada and South America. Kennedy’s lenders have a wealth of experience in several foreign countries and could help you take advantage of the vacuum of capital in some of the most promising young economies worldwide.
If you’re eyeing property for acquisition or redevelopment beyond the borders of the U.S., you need a lending partner that sees the same value you do. Kennedy is actively closing loans throughout the world and is ready to be the lending partner you need for your international commercial real estate project.
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