Mezzanine financing is used in both commercial and residential development to bridge the gap between a senior development loan and the amount of cash or equity that the developer has to put towards the project. Mezzanine financing loans rank behind the senior development loan in terms of priority of repayment, and will be secured by way of a second charge over the scheme. However, using this higher leverage, although slightly more expensive than senior funding, allow developers to reduce the amount of fresh equity they need to put up themselves, thereby providing a more effective deployment of capital and the potential to manage multiple projects at once.
As with most development lenders, and in particular with mezzanine development finance providers, they will only work with experienced developers. Here at Tiger Financial, we are adept and innovative brokers, user our granular industry knowledge to connect prospective borrowers with the best lenders in the market.
As we have mentioned, this is often subject to the experience of the developers, as criteria will apply. Qualified and eligible developers will be part-evaluated on historical projects. This can then be shared with our pool of lenders and could help to drive appetite. Tiger Financial will be able to tell you what your options are and provide a quick turnaround for those seeking capital.
Our funding solutions look to help developers get their projects off the ground, whatever they might be. Mezzanine financing for real estate development is a popular option to reduce the equity cheque when sourcing commercial and residential property development funding.