Mezzanine Finance

100% Residential Funding & Mezzanine Finance

Our specialist panel work with lenders that allow you through mezzanine and equity finance arrangements, borrow up to 100% of the total project cost, either for stand-alone projects or ongoing joint venture relationships. 

This means that experienced property developers can avoid the frustration of a valuable opportunity slipping through their hands. They offer you financial independence to undertake a greater number of projects, secure in the knowledge that adequate funding is available for each transaction. 

Our specialist panel have close relationships with mezzanine lenders throughout the UK who provide the shortfall after the senior debt (bank loan), some mezzanine providers will lend the entire shortfall thus facilitating 100% funding, some will require the developer to put 10% into the deal, others will take additional security in lieu of the 10% (Security is normally by second charge) and finally others will find 100% without the need for a senior debt lender. 

Equity/Joint Venture partners provide the top slice, however rather than charge a pre-determined interest rate or fixed fee, they take a share of the development profits, typically 50/50%. Most will require the developer, as contractor, to provide a cost overrun guarantee to protect the investors return. Typically the investor will either take shares in the company (normally a new SPV) or a profit share agreement, coupled with a second charge on the site, to sit behind the senior debt lender. Interest is normally charged on the debt and a fee may be payable. 

Our specialist panel will ensure that the arrangements are straightforward and free from hidden fees. The mezzanine lender's income can be generated from a share of the profits from the development or in some cases higher exit fees. With the right information 

100% Funding is available to experienced developers or developers who have NHBC/Zurich registered builders working on the project in a variety of structures. Whole Debt lenders will provide finance to complete land purchase and all costs. 

Key Points to remember:

  • Experience is a must, either as a developer, contractor or as an industry professional. 100% or top slice funding is not generally available to those with inexperience.
  • First time buyer properties are preferred over large single properties valued over 500k in the south of England.
  • Return on costs including senior debt finance should be a minimum of 20%.

Commercial, Secured and Bridging Finance is arranged by introduction only.

Commercial Mortgages are not usually regulated by the Financial Conduct Authority.