Mezzanine/ Junior Debt

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Mezzanine/Junior Debt

Providers of Mezzanine Finance for Property Developers

Mezzanine Finance is used to make up the difference between a Developer’s deposit and the maximum amount on offer from a Senior Lender. In order to secure the loan, Mezzanine Financiers generally take a second charge over a development, and because their risk is higher, they generally charge a higher rate of interest.

By supplementing borrowing with Mezzanine Finance, developers can secure higher returns on their investment by utilising less of their own capital.

Mezzanine Funding is a highly complex mixture of debt and equity financing to raise funds for development projects. It’s a loan often only approved with companies who have a solid track record within the industry.

The Mezzanine Funding cost will depend on a variety of factors including:
  • Experience of the developer
  • The location of the development
  • The amount being borrowed
Features of Mezzanine Finance:
  • Finance for residential, mixed use, care homes, healthcare, commercial and hotel projects
  • Coverage in England, Scotland & Wales
  • From £100,000
  • 1 to 3-year term
  • up to 90% LTC
  • Bespoke pricing

 

FAQ’s

Q: Who Can secure Mezzanine Finance?
A: Developers with a proven track record in delivering schemes in the past

Q: What are the typical rates for Mezzanine Finance?
A: Rates for Mezzanine Funding are significantly higher than with senior debt so expect to pay over 10% per annum, but when blending into to the overall deal this can be a cost effective way to finance a project and improve return on equity invested.

Q: What areas of the country will Mezzanine Funders work in?
A: All over the UK