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 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.