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Loan Workouts

Graham H. Stieglitz

Equity Kicker


An equity kicker is another name for profit participation. Profit participation is when the lender asks for a percentage of the profit, which typically occurs in a new construction situation. Thus, if a developer asks a construction mezz lender to increase the loan to value ratio above 85% – 90%, the lender frequently requests an equity kicker (profit participation) of 10%-25% of the developer’s profits.

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