Mezzanine Finance to ‘top-up’ development loan facilities
BLG does not provide standalone mezzanine finance; instead, we can introduce you to an independent funder who offer additional top-up mezzanine facilities.
We regularly work with a small, focused group of mezz funders and, whilst loans are negotiated independently with the mezz funding provider, the following features, terms and loan conditions are “common”.
What is Mezzanine Finance?
A mezzanine loan (or mezz loan) is second charge debt provided to house builders in order to ‘top up’ the level of finance on a particular development project.
The provision of a mezzanine loan can enable housebuilders to improve their cash flow and consider additional development projects; it can also allow property developers to unlock the funding required for their main project.
- £100,000 to £3 million
- Typically 90% loan to cost/70% loan to GDV
- 90% Loan to Cost excluding interest rolled up on the facility
- Loans can include part of the land purchase cost
- Second charge security.
Mezzanine Lending Criteria
Each application is assessed and negotiated on its individual merits but the following criteria apply:
|Loan term:||Typically 12 to 24 months|
|Developments:||Houses, flats, new build, conversions, office to residential and property with a commercial aspect considered|
|Site location:||England, Scotland and Wales in areas with established demand for new homes|
|Borrower:||Property developer/house builder with an established track record|
|Costs:||Typically: Arrangement fee, interest rate, exit fee, valuation, legal, monitoring surveying fees and non-utilisation fee (for committed but non-utilised capital)|
|Planning:||Sites to have outline planning in place.|
How to apply for mezzanine finance
For all development funding enquiries, please call our highly experienced team on 0845 465 6500 or Send us a message to be put in touch with your BLG Regional Director.
If you have any questions about mezzanine financing or the mezzanine finance lenders we work alongside, simply talk with BLG today. Our business is helping you build.
Looking for alternative development funding?
BLG provides a full range of development funding options including Stretch Senior Development Finance. We have the experience and capability to offer the best funding solution to meet your requirements.