Capital Stack Reinvention: From Cheap Debt to Incentive-Driven Finance

For more than a decade, cheap bank debt did most of the work. Sponsors underwrote deals to a low-cost senior loan, layered in modest equity, and let cap-rate compression do the rest. That era is over.

Higher policy rates and tighter credit standards have pushed commercial real estate borrowing and lending sharply lower, with 2023 volumes dropping as higher interest costs and asset repricing froze large parts of the market.  Bank CRE loan growth has slowed to its weakest pace in over a decade as regional lenders face pressure over commercial real estate exposure and funding costs. 

At the same time, a new balance-sheet is stepping in. Global private credit has grown to roughly $1.5–1.7 trillion by 2024 and is projected to exceed $2.5 trillion before the end of the decade, as borrowers trade bank committees for speed, flexibility, and bespoke structures.  And running alongside this capital is a historic surge in public incentives: 10-year clean-energy tax credits, expanded 179D deductions, 45L credits, and infrastructure funding that can cover a material slice of project capex when modeled correctly.

In other words, the new “cheap capital” is not the interest rate on a loan; it’s the portion of your capex that never needs to be repaid because policy paid for it.

The OBA Lens: Policy + Private Credit + Equity

Oliver Bennett Agency sits at the intersection of legislation, incentives, and private capital. We don’t treat policy as background noise; we treat it as a live term sheet.

Where most players see a tighter lending environment, OBA maps three variables at once.

The result is not a generic “capital stack.” It’s an incentive-driven finance plan: sequenced, underwritten to current policy, and built for execution in a market where traditional lenders are no longer the default senior partner.