How CPACE Differs from Mezzanine Financing and Preferred Equity

Contributors
Jared Schlosser
SVP Originations & CPACE, Credit
Allison Neary
AVP CPACE, Credit
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PACE financing is an ideal replacement for mezzanine financing or equity debt. CPACE will reduce your project's capital cost and offer longer-term solutions for construction debt in a wide range of industries.

Mezzanine financing vs. CPACE

Mezzanine debt arrangements typically span three to five years and carry interest rates between 10% and 14% or higher. They also require a balloon payment of interest and monthly payments by borrowers. By contrast, PACE financing arrangements are available for up to 30 years, generally feature interest rates starting at 7% and are non-recourse. 

PACE funding arrangements also allow the pass-through of required payments to tenants, renters or hotel guests and are paid annually or semi-annually. Depending on your requirements, you may also be able to delay your first payment by up to two years.

Commercial PACE Financing vs. Preferred Equity

CPACE loans differ from preferred equity arrangements because they do not confer an equity investment in the company or entity that owns the property. Instead, PACE financing is designed to attach to the property itself and to provide up to 30% of its value to fund construction projects that meet the minimum requirements. 

Learn more about CPACE Financing or contact Peachtree's CPACE team.

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