Mezzanine finance is another option for developers who are looking to stretch their debt that little but further. A mezzanine loan is typically secured by way of a second charge on the property and used to bridge the gap between the senior development finance lender and the equity the developer has.
Similar to stretched senior development finance, mezzanine finance typically takes the gearing of a project to 70%-75% LTGDV or 90% LTC. There are a few select mezzanine lenders who will consider super stretched mezzanine loans, which can take a developer beyond this point. These projects are reviewed on a case by case basis.
Mezzanine finance is priced and structured differently to senior development finance and it is important to understand how it works before committing. Here at Willow Isle Capital, we are here to support you in this decision making.
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Willow Isle Capital formally trades as Canbert Property Ltd, company number - 07913953 and is registered at 35 Frensham Road, Portsmouth, Hampshire, PO4 8AD