FEATURE
SHIFTING THE PARADIGM...AGAIN
Capital Strategies In Private Lending By Kevin S. Kim, Esq., Geraci LLP
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facilities; and (3) correspondence
and summer of 2020 but thriving
and loan sale.
throughout 2020 and into 2021.
From my perspective, the biggest
Going into 2021, it is important
lesson the volatility of 2020 taught
private lenders do not forget these
us was that private lenders needed
lessons. While correspondence and
to
captive
institutional capital markets are an
capital sources. This was proven
important facet to a larger capital
by many private lending funds and
strategy, it should not be the only
(1) balance sheet capital (funds,
other balance sheet lenders not
tool in your toolkit. The rationale is
investor notes, etc.); (2) credit
only surviving during the spring
simple, CONTROL. A well-balanced,
020
tested
lenders’
many
capital
private
strategies.
Although the private lending
industry has very few standardized conventions,
capital
formation
and strategies have been relatively consistent. The three most common capital strategies have always been:
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have
independent,
