Sponsor or Owner Contribution
This is the capital contributed directly by the business owner, sponsor, or project developer. It may include cash, land, existing assets, equipment, or other qualifying contributions. What Capital Stack Consulting Covers A Capital Stack & Funding Consulting engagement may include: Reviewing the project’s total capital requirements Preparing a sources-and-uses analysis Identifying the funding gap Comparing debt and equity options Evaluating the cost of capital Reviewing leverage and repayment considerations Assessing ownership and profit-sharing implications Considering timing and funding availability Structuring a practical financing strategy Organizing information for lenders or investors Comparing proposed financing terms Developing funding scenarios Funding Consulting Services Funding consulting focuses on preparing the client and opportunity for discussions with potential capital providers. Support may include: Funding Strategy Develop a funding approach based on: Business or project objectives Amount of capital required Timeline Existing obligations Revenue and cash-flow expectations Assets or collateral Ownership preferences Risk tolerance Capital Provider Preparation Help organize the information that lenders or investors may request, including: Business overview Project summary Funding request Use of funds Financial statements Cash-flow projections Debt schedule Business plan Property details Management experience Ownership structure Supporting documentation Funding Source Analysis Review potential categories of capital, such as: Banks and commercial lenders Private lenders Real estate debt funds Private investors Angel or strategic investors Equity partners Joint-venture partners Equipment or asset-based financing Government or grant programs, where applicable Alternative business funding sources Deal and Term Review Help the client understand how proposed terms may affect the project, including: Interest rate Fees Loan-to-value or leverage requirements Repayment schedule Maturity date Equity ownership Preferred return Profit-sharing Guarantees Collateral requirements Covenants and restrictions Exit or refinancing considerations Example Suppose a property acquisition and improvement project requires $2 million: Senior loan: $1.2 million Preferred equity: $400,000 Sponsor contribution: $200,000 Common equity partner: $200,000 Together, these sources create a $2 million capital stack. The consulting process would help evaluate whether the structure is realistic, how much each source costs, how repayment or distributions are prioritized, and how the arrangement affects ownership and projected returns. What the Client Receives A completed engagement may provide: Capital stack overview Sources-and-uses schedule Funding gap analysis Recommended financing structure Debt-versus-equity comparison Funding strategy roadmap Capital provider preparation checklist Document requirements Preliminary term comparison Key risks and considerations Recommended next steps Difference From Capital Readiness Consulting Capital Readiness & Business Funding Model focuses on preparing the business to pursue funding. Capital Stack & Funding Consulting focuses on how the funding should be structured once the capital requirement and potential funding sources are being evaluated. In simple terms: Capital readiness: Are you prepared to seek funding? Capital stack: How should the funding be arranged? Funding consulting: Which options may best fit the project, and how should you approach them?
