Will the Bailout Help you Get Financing???

With the new administration nearing 30 days in office many people are either fully supportive or extremely hesitant if the decisions being made on Capital Hill with fix the turmoil or just slow down the decline.  This is a very common situation with a new administration especially when such a heavy change in parties is evident.  While our financial crisis is not a common occurrence the trepidation about newly elected officials is usually very common.

Regardless of your political views or position on the past or present administrations you can admit your concern regarding the state of the US economy.  Based on the initial 1200 page stimulus package passed by the Obama administration there may be some help in the future.  Unfortunately the opinions on this package are about as far ranging as the political parties at this stage.  Many feel there is not enough being done to assist in taking the vast amount of toxic or bad debt away from institutions while others feel that the general public isn’t going to see much of a change based on the lack of tax cuts.

So to answer the question at hand!  ”Will the Bailout Help you Get Financing”?

The general answer is NO, or at least not for the time being.  Based on the overall plan and how monies will be injected into the economic centers of the United States, 2009 and the majority of 2010 will be difficult at best for traditional bank financing. Fortunately there are still many options for developers and entrepreneurs in the form of Equity backed financing and Hard money loans.  While these options may not be as attractive as the old institutional financing options these are in some cases the only options in the current market.

There is a new trend surfacing within the lending communities called the Regulation D Private Placement.  This is not a new process by any means but it is becoming far more popular than it once was.  These practices are based on Equity dilution in projects or companies thus allowing for fresh cash flow by diluting a minority amount of equity thus gaining capital to proceed with your venture.  With this said there are a few very specific things investors look for in these types of transactions.  These investors are easily unimpressed by cheap and poorly developed and executed PPM so a word of caution is in order.

In the event you chose to go the route of a Private Placement Memorandum (PPM) DO NOT look for the cheapest route to completion.  Many online companies offer PPM’s via a basic template but offer no true expertise in the matter.  When choosing a group to draft your PPM you need to look for location, experience and the ability to assist in marketing of these documents.  If you don’t remember these key points you will end up with an elementary PPM and no market to raise capital in.

While JMG Capital Partners, LLC was traditionally a debt only facility they have shifted there point of interest into Equity only financing with the occasional Mezzanine Debt and Hard Money transactions.  With offices at 110 Wall Street they are deeply entrenched into the financial forecasts, interests and condition of many US and International private investors and alternative institutions.  This allows for ease of marketing transactions and also gives the average borrower or principal the opportunity to market an otherwise unknown project to very active and high end financiers.