Invest - Products - Mezzanine
Fund up to 90% of project costs.
Top up funding that allows you to minimise your contribution, enhancing your return on capital whilst maintaining full control.
What is a Mezzanine loan?
Mezzanine loans are used in conjunction with senior debt to reduce the equity requirement for developments and strategic acquisitions.
This type of lending relies on Loan to Gross Development Value (“LTGDV”) and Loan to Cost (“LTC”) caps, and generally attracts a higher, fixed interest rate than bridge or senior development finance.
How does a Mezzanine loan work?
Mezzanine loans reduce the overall equity requirement by topping up the capital stack and adding an additional layer of debt below senior debt. This type of finance allows you to retain the control of the SPV and benefit from any upside.
They are subordinated in priority and rights to the senior lender and require a second legal charge. We structure our mezzanine loans so that they are either fully drawn on day one or periodically drawn over the lifecycle of the investment.
Being second in line within the capital stack, they are paid off after senior debt but before borrower equity and profit.
If you would like to find out more about our flexible funding solutions, please get in touch with a member of the team.