Mezzanine Debt Finance

How can Stamford Capital help me with mezzanine debt finance?

In simple terms, mezzanine funding is fixed rate capital secured on top of your first mortgage to increase the amount of debt for a project or investment. It is subordinated debt, which means the lender agrees to be a second priority on collecting debt.

With current lending restrictions impacting borrowing capacity for many developers, it’s useful if you have limited capital or would like to diversify your equity over multiple projects. For example, the bank might provide 70% of total cost for a construction project. Then mezzanine debt finance is used to boost your financing up to a higher loan to value ratio, usually 90% project’s cost.

We have deep knowledge of the mezzanine debt market, and work with capital partners to negotiate any sensitivity around acquisition compared with valuation uplift or notional equity.

We can also assist with early equity release from a de-risked project and short-term bridging requirements.

Recent mezzanine debt-funded projects:

  • For an inner city residential development with ground floor commercial in Sydney, we arranged a funding and delivery solution for an owner builder. This included a packaged senior debt and mezzanine debt solution from non-bank lenders.

Capital: $7,400,000
LVR: 74%
Funding Partner: Non-bank lenders