Mezzanine & Equity

If you require funds to help cover the difference between the development loan and the total cost of the project we have access to Mezzanine and equity funding.  This can sometimes be arranged as part of the main facility.

 

The cost of this varies from deal to deal.

 

A mezzanine loan could cost in the region of;

Arrangement fee 2% to 3%

Interest rate 15% to 25% pa

Exit fee between 1% and 2% of the amount borrowed.

 

Although Mezzanine is expensive, it tends to be a small element of the overall borrowing and therefore does not affect the overall costs as much as it first appears.

 

The maximum loan to GDV figures must include all of the fees and interest over the chosen term.

A development with a healthy profit margin may allow the developer to borrow up to 100% of the total project cost. In our experience most schemes tend to fit between 85% and 90% of total cost.