Executive Summary of Capital Alliance Funds
Capital Alliance specializes in providing bridge or mezzanine financing for income-producing one-to-four units, multi-family and mixed-use properties.
These loans are originated by the Funds for inclusion in the loan portfolios of its two separate private placement income funds, the Capital Alliance Institutional Mortgage Fund (IMF) and the Calliance Realty Fund, LLC (CRF), and are held until maturity. Individual trust deeds are also available.
Bridge and mezzanine financing is generally short term (12 to 60 month maturities) and spans the period of time needed by the borrower to obtain more traditional lower-cost financing. Examples include the purchase of property and its renovation using a construction holdback account, facilitating a quick closing to pull cash out of a property to take advantage of a business opportunity, or drawing equity out of a group of properties by cross collateralizing them.
Our Investment niche requires a "common sense" lending approach, speed in execution, and the ability to structure a loan transaction outside the institutional framework that deals primarily with "conforming" loans. As a result, the Funds can require and receive higher yields on loans that it originates which accrue to the benefit of Shareholders.
We underwrite the high-yielding loan portfolios of the IMF, CRF and individual trust deeds by applying strict investment policy guidelines relating to safety of principal.
All loans originated for the Funds' portfolios must have a Loan-To-Value (LTV) ratio of 75% or less. This equity buffer of 25% or more insulates the loan portfolios from losses, especially in times when real estate values trend lower. A cap on the pools' exposure ensures there is at least 25% equity in the property at the time the loan is made to help protect the investment.
The Funds target a combined portfolio LTV ratio of 65% to 70%.
