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 lender will enter into a profit share arrangement with the developer, depending on the development risk. Bright Capital Finance have lenders who offer competitive interest rates on funds advanced vs a profit share arrangement.
Advantages to Mezzanine Funding
- developer has the power to 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