Mezzanine Funding for
Builders and Developers.
Obtaining a constant supply of finance for the
development of new build projects can almost be as difficult as
finding the projects themselves, particularly now the credit crunch
is biting hard, and then almost inevitably no soon
is one project is underway then the next business opportunity presents
itself in the shape of that ideal plot of land or re-development
Mezzanine Funding can play a very important role
in the fast growth of companies in the building industry and has
applications for a wide range of schemes including: new housing,
commercial property, industrial estates, retail development and a
whole range of conversion projects.
For most builder and developers Mezzanine
Funding is viewed as an essential part of their business and when
structured properly will protect cash flow and at the same time aid
It works like this; Mezzanine Funding is
essentially a loan that sit along side (or behind) a conventional
bank loan. The interest rate is generally more expensive but the
advantage is gained in the extra cash that is released and by
putting the conventional loan and Mezzanine Funding together the
client can obtain maximum financing.
Cash flow is protected as the debt associated
with Mezzanine Funding is generally settled in a one-off payment
from the proceeds at the end of the development or by a re-finance
package rather than being paid month-by-month over the period of the
development. Therefore there is no immediate strain on cash flow and
the Mezzanine element is redeemed relatively pain free.
There is an art in structuring a Mezzanine
arrangement properly, and to soften the financial implication Apple
Mortgages Limited will negotiate with the parties involved and
endeavour to reach agreement that the Mezzanine loan sits behind the
conventional loan, thus minimising overall costs and potentially
adding to the bottom line profit.
client reception now on
Speak live with a real person here in
Cheshire 24/7. There are no buttons to press and no recorded
24hr fax line 0161 429 0555.
Postal: Apple Mortgages Limited, The Battersby
Buildings, 461 Hempshaw Lane Stockport SK2 5TJ.
Whilst Apple Mortgages Limited are directly
authorised by the FSA, Mezzanine Funding is not regulated by the FSA.
Mortgages Ltd 2008.
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