Structuring mezzanine alongside senior debt requires careful coordination. The mezzanine lender needs comfort that the senior facility terms are workable, while the senior lender needs assurance that the mezzanine won't interfere with their security position. We manage this process to ensure both parties are aligned before commitment.
Profit-share mezzanine structures are increasingly common for larger schemes, where the mezzanine provider takes a percentage of net development profit instead of, or in addition to, a fixed interest rate. This can reduce your cash cost of capital during the build phase, with the mezzanine return contingent on the scheme's success.
The decision to use mezzanine finance should be driven by a clear capital efficiency rationale. If you have sufficient equity for a single project but want to deploy across two or three schemes simultaneously, mezzanine can multiply your effective development capacity without requiring external equity partners.
East Midlands towns along the M1 corridor are seeing increased development interest as logistics and distribution companies expand, bringing employment growth that supports residential demand. Nottingham, Leicester, and Derby each offer distinct market dynamics but share strong fundamentals for well-located residential schemes.
Indicative Terms
Typical terms available for mezzanine finance in Wigston. Actual rates depend on your project specifics and experience.
Interest Rate
From 12% p.a.
Loan to Value
Up to 85-90% LTGDV
Typical Term
12-24 months
Arrangement Fee
2-3% of facility
Rates shown are indicative and subject to individual assessment. Contact us for a bespoke quote.
Representative Deal
A 24-unit commercial-to-residential conversion requiring a stretched capital stack. Senior debt covered 65% of total costs, with mezzanine bridging the gap to 85%. The dual-tranche structure was coordinated with a single monitoring surveyor and governed by an intercreditor agreement negotiated in parallel with the senior facility.
GDV
£5,800,000
Loan Amount
£1,200,000
LTV
85% of Total Costs
Loan Type
Mezzanine (behind £3.5M senior)
This is a representative example. Actual terms vary based on project specifics.
Common Questions
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