Lenders, I'm talking to you...
C-PACE is a terrific source of capital that your clients can utilize to enhance their returns and mitigate risk. Why not be an early adopter and use the C-PACE program to enhance your relationship with existing clients and establish new relationships that will pay dividends for years to come. Even more beneficial, work with TermStreet to evaluate which non-performing loans in your portfolio might benefit from a TermStreet C-PACE Recapitalization. TermStreet created this program and is the first to close a C-PACE recap which you can read more about in our case study here.
Despite the benefits of C-PACE, we constantly hear that lenders have a very negative impression of the C-PACE program. The biggest reason for the negative impression is the old legacy PACE loans that have been funded in the single-family lending space. There have been many bad actors in the Residential PACE Space that has given the program a bad name (some are still around. While we won’t publicly disclose names, we might have a private conversation). These offenders made small PACE loans without lender consent leading to a misconception that all PACE is bad PACE.
Any PACE loan made with TermStreet and its lending partners will be delivered with senior lender consent, whether the PACE loan is closed simultaneously with the senior loan or retroactively. All of our PACE lender and senior lender partners work collaboratively to understand the risks of the overall capital structure and to underwrite an appropriate loan for the situation. Any participant in the capital stack can reject the deal along the way (although we hope you don’t). Nothing is hidden and you can decide how to underwrite the overall risk to the transaction (although we have suggestions).
There are other lender misconceptions about C-PACE, but this is the most egregious and damaging to the program.
So we have your attention. What’s Next? Take a look at our underwriting guide for Lenders that explains how we view C-PACE and how we underwrite when C-PACE is included in the capital stack. I bet you will be surprised about how beneficial PACE really is to a transaction. Most people working in C-PACE are most interested in saving the planet. At TermStreet, we care about the planet as well, but at our core, we are capital markets geeks that view this as a tool to make our lender and borrower clients more money! Start with the underwriting guide or reach out to us to learn how you can make more money with our C-PACE lending solutions.