Property Mezzanine Finance
Bridge the gap in your development capital. We arrange bespoke mezzanine funding to minimise your cash contribution and maximise your return on equity.
Strategic Capital Injection
When primary 'senior debt' lenders cap their exposure, mezzanine finance steps in to top up your construction budget. This highly specialised lending allows developers to stretch their capital further:
What is Mezzanine Finance?
It is 'subordinated' or 'second-charge' debt that sits behind your primary development loan
(the senior debt). If your primary lender provides 65% of the project costs, a mezzanine
lender might provide another 15-25%, drastically reducing the amount of personal cash you
need to inject into the scheme.
Increasing Return on Equity (ROE)
By using mezzanine finance, you commit less of your own capital to a single project. This
frees up your liquidity, allowing you to run multiple development sites concurrently. While
mezzanine interest rates are higher than senior debt, the overall Return on Equity (ROE)
across your portfolio is significantly amplified.
Pricing & Security
Because the mezzanine lender takes a 'second charge' (meaning they are second in line to be
repaid if the project fails), they take on higher risk. Consequently, interest rates are
higher. We negotiate aggressively with institutional funds and private equity to secure the
most blended, cost-effective capital stack for you.
The Intercreditor Agreement
Securing mezzanine finance involves complex legal coordination between the senior lender and
the mezzanine lender, governed by an Intercreditor Agreement. We manage this sophisticated
legal process, ensuring both lenders align so your project drawdowns occur without delay.
Leveraging 'The Stack'
Structuring a capital stack with senior debt, mezzanine finance, and developer equity is an art. We model the blended interest rates and arrange the funding lines to ensure your development remains highly profitable while preserving your personal liquidity.