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

I often hear this objection: "We’re not interested in more competition for our deals." That statement reveals a fundamental misunderstanding about how C-PACE loans actually work – and it’s costing the industry billions in missed opportunities.

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

• Myth #1: C-PACE competes with your loan. Reality: C-PACE financing requires your consent. You remain senior, retain control, and actually reduce your total dollar risk exposure.
• Myth #2: C-PACE slows down deals. Reality: Our consent process averages 2-3 weeks. Compare that to sourcing a participation bank or structuring mezzanine debt.
• Myth #3: C-PACE is only for “green” projects. Reality: PACE funding helps complete the capital stack. Most projects naturally qualify because they exceed outdated local energy codes.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. Developers at Kaeding Development Group transformed 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 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, C-PACE funding 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: One consent decision unlocked the entire capital stack
• Client retention: Developer got the creative PACE loan solution they needed without shopping the deal elsewhere
• Community impact: 350+ new housing units, strengthening the local market

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

PLG Originator Matthew McCormack said: "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 Financing in 2025

Today’s market creates perfect conditions: developers are moving forward with stalled projects, but banks are cautious and conservative on loan sizes. Your best clients need capital solutions.

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

• Lose the deal (and maybe the client)
• 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 financing to fund more deals within their credit guidelines, keep top clients happy, and often gain valuable deposit relationships.

The Real Partnership Advantage

C-PACE isn’t about pushing your leverage – it’s about working within your restrictions more effectively. Whether managing concentration concerns, loan size limits, DSCR constraints, or simply serving larger relationships, C-PACE lending respects your position as senior lender.

The question isn’t whether C-PACE financing works – it’s whether you’ll embrace it before your competitors do.

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

Meet with an originator or get a quote!