MEZZANINE FINANCE

Mezzanine finance for your next development.

Mezzanine finance sits behind your senior debt, filling the gap between what your main lender will provide and the total project cost. It means you put in less of your own money, freeing up capital for your next deal.

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Tell us about the funding gap, senior debt and exit route.

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We explain fees, risks and next steps before any application.

Your home may be repossessed if you do not keep up repayments on your mortgage. Some specialist or buy-to-let finance may not be regulated by the FCA.

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Reduce Equity Needed

Project-specific leverage

Second-Charge Lending

Flexible Terms

How mezzanine finance works

Your senior lender (the main development or investment loan) takes a first charge on the property. The mezzanine lender takes a second charge, providing additional funding on top. The combined borrowing depends on both lenders' cost and value limits and your required equity contribution.

The trade-off is cost. Mezzanine rates are higher than senior debt because the second-charge lender carries more risk. But the numbers often make sense because the reduced equity requirement lets you take on more projects simultaneously, or simply preserve your cash reserves.

When to use mezzanine

Development projects

Senior lending is limited by both project costs and completed value. Mezzanine may reduce your equity contribution, subject to both lenders' limits and consent. A percentage of GDV cannot be subtracted directly from a percentage of total project cost.

Portfolio growth

If your cash is tied up in existing projects, mezzanine lets you start a new acquisition without waiting for previous sales to complete. It is a scaling tool.

Common questions

What does the senior lender think?

The senior lender needs to agree to the mezzanine being in place. Not all senior lenders permit it, so we work with funders who are comfortable with a second charge behind them. This is important to get right at the outset.

Typical cost structure

Mezzanine rates, fees and interest-payment terms are negotiated for the project. Compare the full cost of both senior and mezzanine borrowing. It sounds expensive in isolation, but the return on equity can be significantly higher because you are deploying less of your own cash.

Profit share arrangements

Some structures combine interest with a share of development profit; the terms are negotiated for the project. This can work well if your margins are tight during the build phase but strong on exit. We model both structures for you.

Personal guarantees

Most mezzanine lenders require a personal guarantee from the directors. The extent of the guarantee varies by lender, from partial to full. We will be upfront with you about what each funder requires so there are no surprises.

How the funding fits together

Mezzanine finance is not right for every deal. We model the cost against your projected returns and only recommend it when the numbers genuinely stack up. If it does not work, we will tell you.

Other specialist services

Development Finance

Ground-up construction and conversion funding.

Bridging Loans

Short-term finance when speed matters.

Property Refurbishment

Light and heavy refurb finance for value-add projects.

Mon – Fri	9am – 6pm
Saturday	9am – 1pm
Sunday	Closed