MEZZANINE FINANCE

We are experienced commercial mortgage brokers-packagers offering funding to help your business grow.

Mezzanine development finance or Mezzanine loan provides a second layer of debt finance (debt with a 2nd position lien also known as Junior Mortgages).
It is provided to bridge the gap between the level of senior debt finance (typically going up to 60%) and the developer’s or the investor’s equity investment into the project or the purchase; a second charge usually secures it.

The Mezzanine piece size is typically between 20%-30% of the loan value. Mezzanine development finance reduces the burden on current cash flow and thus helps the project sponsor to manage his finance as well as his actual liquidity

We concentrate on the entire lifetime of the project from the beginning till the end and focus specifically on the timing that the finance is needed.

The mezzanine loan is easier to manage. In most of the loan agreements the mezz piece can be paid or regularly or by rolling up to the loan balance and being paid at the end of the project after the capital loan, it reduces the burden of the ongoing cash flow during the project life.

It is important for the borrower to be able to make a professional comparison, among all the lenders that offer mezzanine loans.

Not all the mezzanine loans are the same and have the same conditions, however, above all there are issues like flexibility and customer service that you cannot measure them with numbers, but only from your personal experience.

We always provide our clients with a professional, honest and transparent opinion about each offer and an opinion about other issues that they cannot see in the numbers and the written offer.

There are cases that its worth to pay a slightly higher interest rate but to get a real strategic finance partner that will be beside you all the way until the successful completion of the project and afterwards for different projects in the future.

Mezzanine financing is used as a “top-up” fund linking up the gap between the deposit available to the developer and the loan available to the senior lender.
Although senior debt can usually provide up to 65% of the GDV or 80% of the project cost, the mezzanine lender will bear up to 90% of the project cost, which means that the developer must bear 10% of the project cost.

Please note that, because the second legal fee is secured by the mezzanine funding and the volume of the loan is higher, the expense is higher than the priority debt.

Mezzanine financing is used as a “top-up” fund linking up the gap between the deposit available to the developer and the loan available to the senior lender.

Although senior debt can usually provide up to 65% of the GDV or 80% of the project cost, the mezzanine lender will bear up to 90% of the project cost, which means that the developer must bear 10% of the project cost.

Because the second legal fee is secured by the mezzanine funding and the volume of the loan is higher, the expense is higher.