At EB5 Lending Alliance, we specialize in senior loan structures because they offer a stronger layer of protection.
Repayment Priority
Investor is first in line to be repaid, ahead of other lenders or equity partners.
When an investor participates in a senior loan, they are entering in a safer position in real estate financing.
A senior loan means the investor is first in line to be repaid–before any other lenders or equity partners.
This make it an appealing option for those who prioritize lower risk and more predictable returns.
Capital Protection and Security
Clear and enforceable priority for repayment through project’s assets
EB5 Lending Alliance specializes in senior loan structures because they offer a stronger layer of protection.
If a project does not go exactly as planned,the senior loan holder is the first to be repaid through the project’s assets–whether from rental income, a sale, or even foreclosure.
This positioning provides the Investor with better confidence, knowing that their capital has a more clear and enforceable repayment priority.
Position in the Capital Stack
Senior loan is repaid before mezzanine debt or equity
A senior loan sits at the top of the capital stack, meaning it is repaid before other types of financing. such as:
- Mezzanine loans, which are repaid only after the senior loan.
- Equity, which is the last in line for repayment.
Understanding this repayment hierarchy is essential when evaluating the level of risk in any given project.
A Consistent Approach
Focused on capital structures incorporating senior loan financing
Projects led by the EB5 Lending Alliance team has been structured using senior loans.
This consistent approach reflects the firm’s operating framework, emphasizing senior-level financing structures and capital stack positioning.
The Alternative: Mezzanine Loan with intercreditor Agreement
While a senior loan is always the preferred structure, in certain cases a mezzanine loan may be considered–but only when a strong intercreditor agreement is in place.
This agreement clearly outlines the mezzanine lender’s rights and protections in relation to the senior lender.
When properly structured, it can provide an acceptable level of security and negotiated control for investors who understand the added risk and are seeking potentially higher returns.