Exit Strategy for borrowing hard money
Once you’ve made the decision to borrow private money, you must know what your exit strategy is and you should even have multiple exit strategies. Without a clear exit, you will never get a private money lender to give you the time of day!
In the process of devising a clear exit strategy it is crucial that you mastermind your various options with your partners or members of your advisory team. Many times, you and your partners haven’t thought of everything that could happen.
The exit strategy you have devised could have some holes in it that you hadn’t considered. This is another reason why you should seek the advice of a trusted private money broker when pinpointing your exit strategies. An experienced broker has seen many deals pass over his or her desk and, on the negative side, has also seen many deals go bad usually because of poor exit strategy. A good broker can help you and your partners trouble-shoot your proposed exit strategies and get clear on what you will do if….
Would anyone care to share examples where a poorly designed exit strategy may have meant the demise of a good project? On the flipside, would anyone like to share an example where the good exit strategy saved a bad project?