Conservative Loan-To-Value Limits
A loan-to-value (LTV) limit is the amount of the loan divided by the value of the property. Lower LTVs mean lower risk because there is more collateral securing the loan. LYNK makes loans where the LTV at the completion of any improvements is typically no greater than 70% with a target portfolio LTV of no more than 65%.
Long-term loans can be risky, as interest rates and market conditions can vary greatly over time. We focus on short-term loans, typically for 6 to 18 months, so we can underwrite loans to a specific set of market conditions and quickly adapt when things change.
Focus on Repayment
For every loan, we focus intently on how our funds will be repaid, even if the borrower defaults. We include an analysis of the borrower’s experience and capacity to complete the project, the strength of the renovation or improvement plan, and overall market conditions. If we do not believe that LYNK can take over a project and complete it successfully, we don’t do the loan.
Limited Geographic Focus
LYNK Capital currently lends in ten states in the mid-Atlantic and Southeast because of their attractive demographic factors and our familiarity in these markets. We live and work in the markets in which we lend, with offices in the suburbs of Baltimore, Maryland; Raleigh, North Carolina; and Jacksonville, Florida.