C-PACE Isn't Your Competition: We’re Your Superpower

The Billion-Dollar Misunderstanding: Why Most Lenders Get C-PACE Wrong
Most lenders assume C-PACE slows deals down. What if I told you our consent process is faster than mezz loan approvals?

I often hear this objection from commercial lenders: "We're not interested in more competition for our deals." It reveals a fundamental misunderstanding about how C-PACE actually works – and it's costing the industry billions in missed opportunities.

Here's what most lenders get wrong about C-PACE:

• Myth #1: C-PACE competes with your loan. Reality: C-PACE requires your consent. You stay senior, keep control, and actually reduce your whole dollar risk exposure.
• Myth #2: C-PACE slows down deals. Reality: Our consent process averages 2-3 weeks. Compare that to finding a participation bank or structuring mezzanine debt.
• Myth #3: C-PACE is just for "green" projects. Reality: It's about capital stack completion. Most projects naturally qualify because they exceed outdated local energy codes.

The Conversion That Changed My Mind

Last year, we worked on a complex office-to-residential conversion in downtown St. Paul. The developers at Kaeding Development Group were transforming the historic Landmark Tower into 350+ apartment units (a $75M+ project).

Here's what caught the lenders' attention: "This was a uniquely complicated transaction with a variety of capital sources and one where the C-PACE exceeded the bank financing," explained the senior loan officer who consented to the deal.

Think about that. In a market where conventional bank financing had slowed significantly, C-PACE didn't just fill a gap – it became the primary capital source that made the entire deal feasible.

Why the bank partner loved this structure:

• Minimal exposure, maximum relationship value: Bank stayed senior with reduced risk while enabling a transformative community project
• No participation headaches: Instead of finding multiple bank partners, one consent decision unlocked the entire capital stack
• Client retention: Developer got the creative financing they needed without shopping the deal elsewhere
• Community impact: 350+ new housing units, strengthening the local market they serve

The C-PACE proceeds financed essential building systems: envelope, windows, HVAC, plumbing, lighting, and mechanical systems. All improvements required for the conversion that will save $1.2M annually.

PLG Originator Matthew McCormack's take: "The developers worked hard to piece this capital stack together. I'm excited to be part of their solution."

Why Smart Lenders Are Embracing C-PACE in 2025

Today's market environment creates perfect storms: developers are finally moving forward with projects that were previously stalled but banks, while more active, are being super cautious and conservative on the check sizes they want to write. And your best clients need capital solutions.

When internal limits cap you at manageable loan sizes, but your clients need more dollars, you have three choices:

• Lose the deal (and maybe the client)
• Try to find participants to share the deal (and your margin)
• Complete the capital stack with a non-recourse, 25-30-year fixed-rate partner that requires your consent

Over 250 senior lenders have chosen option #3. They're using C-PACE to fund more deals within their tamped-down credit guidelines, keep their best clients happy, and often gain valuable deposit relationships in the process.

The Real Partnership Advantage

C-PACE isn't about pushing your leverage – it's about working within your restrictions more effectively. Whether you're dealing with concentration concerns, loan size limitations, DSCR constraints, or simply want to serve larger relationships without writing bigger checks, the structure works because it respects your position as senior lender.

The question isn't whether C-PACE works – it's whether you'll figure it out before your competitors do.

Ready to see how C-PACE could work for your next deal?

Meet with an originator or get a quote!