Development near Charleston, Georgia

Borrower		A developer in Georgia
Loan		A $6,000,000 three-year loan with interest at 12% for the first year, and 18% for thereafter. years.
Collateral		A first mortgage lien on a 776-acre master planned community development in Georgetown, South Carolina (midway between Myrtle Beach and Charleston).located at the intersection of the Sampit River and Turkey Creek, two miles west of downtown Georgetown, with approval to build 1,710 units (both single and multi-family). All federal, state and county permits had been approved for the entire develo pment. Both archaeological and endangered species requirements had been met and approved. All environmental phase one investigations had been completed and have been approved. Most of the roads, water, sewer, power, telephone (fiber optic cable) and digital cable TV had already been put in for Phase 1A.
Guarantors		The principal of the Borrower
Purpose		The Borrower needed to pay down existing mortgages and property taxes, to complete the infrastructure for the next phase of the project, and to build an impressive entry feature to the development.
Exit strategy		The borrower planned to repay us from the sale of lots in the development.
Outcome		The loan went into default immediately. However the developer found another source of finance and re-financed the loan after four months. The project was highly successful.