Fast Mezzanine Finance Australia
Applying this funding to the property development arena: if you need quick, easy financing for development purposes, mezzanine financing in Australia may just suit your requirements. Lightspeed has observed over the years that most of our clients navigate to this funding option.
If you’re facing difficulties securing traditional financing, you may want to consider a subordinated debt such as mezzanine financing.
Get in touch to get startedWhat is mezzanine finance?
Mezzanine finance is a subordinated and hybrid form of debt useful for large projects. It offers property developers quick cash to bridge the funding gap between a senior loan and equity. The gap emerges from the capped Loan-to-Value Ratio (LVR) on traditional financing options.
Mezzanine financing can also be used when the project’s perceived risk is high and you can’t raise enough capital through traditional options to complete your project.
You can secure between 65% and, in some cases, up to 90% of your project’s Total Development Cost (TDC) using a mezzanine loan. The balance is required to be brought by the borrower as equity. In addition to equity, you will also need to mitigate the project’s risk. To reduce the perceived risk of your project, you can show:
- Presence of senior debt on your balance sheet
- Advances received from buyers in the development phase
- Construction contracts detailing expected costs
Why mezzanine finance for property development is a good choice
- An ideal choice, particularly for property developers finding it difficult to access traditional funding sources.
- Offers quick cash, plus flexible repayment terms.
- Developers are often reluctant to raise capital via equity because they don’t want to lose control. With this kind of financing, you retain almost full control over your project’s development.
Mezzanine loan vs. bridging loan
A mezzanine loan is often compared with a bridging loan, since both offer quick access to cash. However, they differ in terms of tenure. A bridging loan isn’t the most appropriate choice for property developers because of its short tenure – mezzanine loans have a considerably longer tenure of up to 18 months, rather than a short 3-month term.
Why Lightspeed is your best choice for securing mezzanine funding
You want to reach a goal, and we want to help you get there with your funding requirements. We understand the quicker the development project is completed, the quicker the assets can be sold, your profit realised, and the loan repaid. Lightspeed specialises in tailoring a loan to ensure your development is fully funded throughout the building process, or providing funds so the project can move to the next stage of construction.
When you choose us as your provider, you will benefit from:
- Fast approvals
- Competitive interest rates
- Loans up to $20 million+ as a speciality
- Private funding for property developers
- In-house settlements without relying on third-party finance providers
- A commitment to managing long-term client relationships
If you’re looking for mezzanine financing in Australia, let us help you navigate the process – operating in all major cities of Australia and, in many cases, regional areas as well. Lightspeed is a leading provider of development and construction finance throughout Australia and should be considered when making funding decisions.
Speak with one of our advisors, or call 1300 133 406.