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Q: Loan question ( Answered,   0 Comments )
Subject: Loan question
Category: Business and Money
Asked by: shoaib-ga
List Price: $2.00
Posted: 24 Mar 2003 04:53 PST
Expires: 23 Apr 2003 05:53 PDT
Question ID: 180228
What is the purpose of 'joint venture loan'?
Subject: Re: Loan question
Answered By: jeanwil-ga on 24 Mar 2003 05:48 PST
Hi shoaib-ga,

Here is the information that you seek.

"Joint venture financing is a means of structuring a mortgage in order
to help you, the client, maximize cash flow potential. How? By
"teaming" you with a lender as an investor."

Everything You Always Wanted to Know About Joint Venture, Joint
Venture Financing, And Joint Venture Agreements

“The phrase "joint venture" or "joint venture financing" covers a
broad range of potential financial structures with varying joint
venture agreements. In the most general terms, it is any financing in
which two or more parties known as coventurers share costs, risks, or
liabilities associated with raising funds for a project.
By participating in a joint venture or joint venture financing,
borrowers can spread risks, minimize credit exposure, and often share
in asset ownership. Joint venture agreements are drafted to cover all
these points.
In the traditional form of joint venture or joint venture financing,
each coventurer raises its share of the funds on the basis of its own
direct credit and its ownership interest in project assets. Or both
credits are employed where the one with undesirable credit will rely
on the one with superior credit. Joint venture agreements do not
necessarily address the manner in which funds are raised, though it
could be made part of the agreement…”

“Over the years, we have used Structured Joint-Venture Financing to
help our clients maximize cash flow potential from a particular
project by "teaming" the customer with a lender as an investor.
Borrowers do not always start out looking for partners, but sometimes
recognize the value over "straight" debt-financing. Structured
Joint-Venture Financing can be complicated and is not appropriate for
all projects. When it makes sense, we will advise our customers
appropriately, and match the right lender/partner to the project.”

Joint Venture Financing Agreements

Hope this helps.

Best Regards


search words 'joint venture financing'

Request for Answer Clarification by shoaib-ga on 27 Mar 2003 23:00 PST
Hello  jeanwil-ga and please note that you have provided excellent and
beautiful answer to my posted question. But please provide to me a
little more clarification of your answer so I shall be able to give to
your answer a five star rating. I want to know that if an organization
provides "joint venture loan" in  addition to the 100% of the 
property cost for mortgage loan, then in this case what would be the
'security' for the joint venture loan or partnership  besides  upto 
100%  mortgage loan for the property? Thanks for your help.

Clarification of Answer by jeanwil-ga on 28 Mar 2003 05:48 PST
Hi shoaib-ga,

To clarify your question, the other security or collateral required

1) another property where a 'collateral mortgage' could be taken out
on to secure the banks interest.
2) personal life insurance where there is a cash surrender value (CSV)
3) certificate of deposits 
4) your personal house or personal commercial property
5) property insurance

The banks need to ensure that should anything happens that they would
be the first one paid. 100% mortgage loan is normally very risky so
security/collateral is very important

Hope this helps

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