What is Mezzanine Development Finance?
Updated: Jun 14, 2022
A mezzanine loan (or mezz loan) is second charge debt provided to property developers in order to ‘top up’ the level of finance on a particular project.
The provision of a mezzanine loan can enable property developers to improve their cash flow and consider additional development projects.
A mezzanine finance loan gives a property development flexibility as there is the option to choose from a range of repayment schedules and structures to suit the business. A mezzanine loan can also allow a developer to reduce the capital in a project and enable them to fund other projects.
Typically a mezzanine loan covers 90% of the project costs and up to 75% of the GDV. Loans can include part of the land purchase cost and take a second charge over the property.
There is a full range of development funding options available to assess the optimal finance package for a developer’s project and business including Stretch Senior Development Finance.
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