What is Mezzanine Funding?
Mezzanine Funding is the term used for funding the gap between your main loan and the total development costs. Mezzanine funding can often result in the full funding of the equity required to complete the project.
A Mezzanine lenders interest rates will be higher then the senior debt as the risk is higher for the lender as it’s depending on the development risk. Bright Capital Finance have lenders who offer competitive interest rates on funds advanced.
Advantages to Mezzanine Funding
- developer can determine the level of equity (if any) they wish to contribute to a project
- the property developer can continue with the project on a ‘stand alone’ basis
- control is retained by the developer, not joint venture partners
- it can be raised relatively quickly as opposed to equity