Mezzanine Funding

What is Mezzanine Funding?
Mezzanine Funding fills the gap between a developer’s own equity and the amount of senior debt that a bank / lender will provide.
The mezzanine debt will normally be secured by way of a second charge over the property while the bank / lender will hold a first charge.
Bank lending to the property sector has reduced dramatically in recent years, and many successful developers and profitable projects have made use mezzanine support to fill that funding gap
Bridging Loans
Bridging Loans are no different to long term mortgages in that they are secured by a first charge or a second charge on the property. Bridging Loans are secured and have the same steps of valuation and preparation of a legal charge deed have to be taken. Bridging loans are normally for 6-12 months’ duration.
Bridging Facility is intended to be quicker than regular mortgage finance. Most bridging lenders typically employ a small panel of valuers who respond much quicker than is normal and in most cases the lender will insist on either a 90 or 180-day open market sale valuation and for this reason the value of the property to a bridging lender may be less than you expect for this reason.
Bridging Loan Types and Terms
Refinance Bridging
Buying a property “at below market price”
Auction purchase
Land purchase
Refurbishment
Residential and Commercial property purchase
Cash release bridging
1st/2nd/3rd charge loans
Term up to 18 months

HELPING FUND BUSINESS, PROPERTY AND VEHICLE FINANCE

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