Reading an exit before writing a loan
Every private credit facility is a bridge to somewhere. The craft is in being honest about where the bridge lands.
The most important sentence in any credit paper is not the one describing the security. It is the one describing the exit. Property-backed lending fails slowly and then quickly, and it almost always fails at the exit.
This sounds obvious. In practice, exit analysis is the most rushed page in most credit files, because at application time the exit is a hypothesis and hypotheses are easy to write. "Refinance to a major bank." "Sale of completed stock." "Settlement of pre-sales." Each of these is a plan until it is tested, and a hope after it fails.
A disciplined exit analysis asks uncomfortable questions early. Is the refinance market genuinely open to this borrower, at this leverage, with this asset class, in twelve months — or was it open last year? Is the sales evidence current, arm’s-length and specific to the asset, or is it a median suburb figure doing a job it was never designed for? Does the timeline survive a slower market than the market of the application date?
The honest answers change deals. Sometimes they change pricing. Sometimes they change the structure — a longer term, an interest reserve, a staged release. Sometimes they end the conversation, which is the cheapest possible outcome for everyone including the borrower, who is better served by a "no" at week one than an enforcement at month eighteen.
Just as important: the exit is not a document to be filed at approval. We structure facilities so the exit assumptions are monitored through the life of the loan. Pre-sales that fall over, a refinance market that tightens, a sales campaign that runs long — the earlier the divergence is visible, the wider the set of good options. Extensions negotiated at month nine are conversations. Extensions requested at month twelve are events.
For introducers, this discipline reads as predictability: the terms quoted at the start are the terms that survive credit, because the hard questions were asked before the indicative, not after it. For borrowers, it reads as a lender who plans the whole journey, not just the drawdown. The loan is the bridge. We do not write bridges to nowhere.