ABSTRACT
We have already looked at various ways of sharing profits in a property venture between entrepreneur and financier. The aim in most cases is to reduce the cost of debt finance, or reduce the equity contribution required, in return for conceding a portion of the profit from the project. Use of convertible stocks, leasebacks, complex lease structures to apportion the rental flow — all are profit-sharing techniques of one kind or another. But straight bank loans may also be structured to give the lender a share in ultimate profits.
