Need a boost with a financial shortfall on your development loan?
Do you have a bespoke finance requirement that requires a hassle-free funding solution?
Our wide reaching relationships with funders and investors enables us to tailor a bespoke financial package for you to achieve your goal.
Mezzanine Finance is secured by a second charge and used to “top up” the senior debt (first charge) facility if a developer does not have sufficient cash resources to make the project work using senior debt alone. Whilst senior debt can generally provide up to 65% of GDV or 80% of project costs, mezzanine lenders will top up to 90% of project costs, meaning the developer has to contribute 10% of project costs.
Mezzanine Finance therefore is another type of development finance, which is used to give you more money than the “senior” lender can provide. As Mezzanine Finance is secured by a second legal charged, and at a higher Loan To Value, it is more costly than senior debt.
– Loans of up to 75% of the Gross Development Value, or
– Loans of up to 90% of Total Project Costs (plus finance costs).
– The Arrangement Fees charged by the Mezzanine Finance Providers are case by case and start from 1%
– Interest Rates for Mezzanine Finance start from 12% per annum
– Exit fees are generally charged but again, case by case
– Minimum mezzanine loan size is £100,000, with no maximum loan size
– No profit share is generally required with mezzanine loans
– Up to 36 months terms available on larger schemes
We aim to give our clients as much information about each service as possible to help them make an informed decision on their next move.
Below are some frequently asked questions about Mezzanine Finance.
– Mezzanine finance is secured by a Second Charge
– It is essential for developers to be experienced, to access mezzanine finance
– Full detailed planning consent needs to be granted
– Valuation Reports & QS/MS reports which are instructed by the senior lender, can also be utilised by and addressed to the Mezzanine Lender
– Available for residential and commercial property development schemes in England, Scotland and Wales
– Personal guarantees will be required
– Applicant details, and company name and number
– Directors & shareholders CV’s or experience details
– Development site address
– Details of senior lender and copy of senior debt offer letter
– Copy of the planning consent
– Detailed financial appraisal and cash-flow
– Detailed build costs/quote
– Schedule of accommodation
– Full Details of the professional team (contractor, architect, structural engineer, CDM co-ordinator and so on)
– Procurement method. For example, design and build or construction management
– Comparable Sales details (or agent’s opinions) to support the GDV
We are interested to hear about your requirements. Don’t be afraid to explain in more detail if you wish as the more information we have will help us to quickly provide you with advice or suggestions. We are here to help.
Do you have a client that is in need of a funding solution to a financial problem? We can help. Our introducer scheme can open up many more doors allowing you to place your client with the perfect finance package for their needs.