Mezzanine finance
Mezzanine finance sits between senior debt and the developer's equity in a development and may be secured by a second-ranking mortgage or an interest in the project.
Mezzanine finance, explained.
It allows a developer to complete a project with less cash equity, at a cost that reflects its position behind the senior lender. Senior lenders set conditions on it, including consent and an intercreditor deed that governs who is paid when.
Mezzanine finance can reduce the developer's cash equity requirement, but adds finance cost and risk if sales slow.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
