🏦 Mezzanine Finance

Mezzanine finance sits between the senior development loan and the developer's own equity in the funding stack. It allows developers to take on larger schemes without committing 100% of the equity themselves — or to recycle equity from completed schemes into new ones more quickly.

The Funding Stack

• Senior debt — typically 60–65% LTGDV from a mainstream development lender
• Mezzanine — a further 15–25% LTGDV from a specialist mezzanine provider, sitting behind the senior in the security stack
• Developer equity — the remaining 10–25% contributed by the developer

Combined, this can fund up to 85–90% of total project costs on the right scheme — allowing developers to stretch their equity significantly further than a senior-only structure.

When Mezzanine Makes Sense

• The scheme is too large for your available equity at senior-only LTVs
• You want to run multiple schemes simultaneously without tying up all your capital
• The profit margin is strong enough to absorb the higher cost of mezzanine
• You have a strong track record that supports a more leveraged structure