Private Money 2nd Mortgage for Boca Raton School in Bankruptcy

Gelt Financial, a direct CRE lender in South Florida, provided a $250,000 2nd mortgage debtor-in-possession (DIP) financing for school in Boca Raton, FL. The school, for troubled children, had shut down due to COVID and didn’t generate any income. Therefore, the non-profit organization operating the school went into Chapter 11 bankruptcy. The 30,000 square foot property had lots of equity. We estimated the value to be around $6,000,000 and the 1st mortgage balance was $2,900,000. Gelt has long and deep experience in DIP and workout financing. The court receiver approved our loan which was used to help work out the bankruptcy. The loan term is 12 months with extension options. The plan is to sell the property within that time to pay off both mortgages and other debts. This private mortgage was funded in March 2022.