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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.
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
Build Safe is a trading name of London Belgravia Brokers Ltd, Registration Number: 9069586 . Trading address is 60 Margaret Street, London, W1W 8TF. London Belgravia Brokers Ltd is an appointed representative of Ten Insurance Services Ltd, which is authorised and regulated by the Financial Conduct Authority.
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