Mezzanine Finance — Glender.io

95%

LTGDV combined (senior + mezz)

12–18%

Typical rates (per annum)

6–36

Term (months)

5%

Equity required (as low as)

Understanding Mezzanine Finance

What is mezzanine finance?

Mezzanine finance is a layer of subordinated debt that sits between your senior (first charge) loan and your own equity in a property transaction. It fills the gap when your senior lender provides 60-70% of the project cost but you do not want to — or cannot — fund the remaining 30-40% entirely from your own pocket.

By adding mezzanine finance, a developer can achieve combined leverage of up to 90-95% LTGDV, reducing the equity requirement to as little as 5-10%. The trade-off is higher interest rates on the mezzanine tranche — but the return on equity can be significantly amplified. The Global Lender network includes dedicated mezzanine providers.

✓ Subordinated to senior debt (second charge or intercreditor)
✓ Reduces developer equity requirement
✓ Amplifies return on equity (ROE)
✓ Facilities from £250,000 to £20,000,000
✓ Works alongside your existing senior lender

The Capital Stack

Senior Debt (60-70% LTGDV)

First charge. Lowest cost of capital. Provided by your primary development or bridging lender.

Mezzanine (15-25% LTGDV)

Subordinated debt. Higher rate but dramatically reduces your equity requirement. This is the gap filler.

Developer Equity (5-20%)

Your own capital. With mezzanine, this can be as low as 5% of the total project cost.

= 100% of Project Funded

Maximum leverage. Maximum return on your capital invested.

Why Glender

Key features

Mezzanine finance that supercharges your development programme. Your Generous Lender structures the stack so you can build more with less.

📈

Leverage Amplification

Push your combined leverage to 90-95% LTGDV. Deploy your equity across more projects simultaneously instead of locking it into a single scheme.

💰

Rolled-Up Interest

Mezzanine interest is typically rolled up and repaid from project profits on exit. No monthly cash flow drain during the build or renovation period.

🤝

Senior Lender Compatible

Our mezzanine providers work with established intercreditor agreements and are approved by the majority of senior development lenders on the Glender panel.

🚀

Scale Faster

Instead of one project at 30% equity, run three projects at 10% equity each. Mezzanine is the catalyst that turns a single developer into a development business.

📊

Profit Share Options

Some mezzanine providers offer lower headline rates in exchange for a share of project profits. Align your funder's incentives with your own success.

🌐

Global Capital

The Global Lender network connects you with mezzanine capital from institutional funds, family offices, and specialist debt funds across the UK and internationally.

How It Works

Structuring your capital stack

Glender helps you layer mezzanine on top of your senior facility for maximum leverage.

1

Share Your Deal

Project appraisal, senior facility details (or requirement), and the equity gap you need filled.

2

Mezzanine Matching

Glender identifies mezz providers who work alongside your senior lender and have appetite for your scheme type.

3

Intercreditor Agreed

Senior and mezzanine lenders agree intercreditor terms. Glender coordinates the process between all parties.

4

Fully Funded

Senior, mezzanine, and equity stacked. Project fully funded with minimal capital from your own pocket.

Eligibility

Who can apply?

Mezzanine finance is primarily used by property developers and sophisticated investors who want to maximise leverage on development and refurbishment projects. Some experience is typically required, though first-time developers with strong projects may qualify.

✓ Experienced property developers
✓ SPVs and development companies
✓ Joint ventures and partnerships
✓ First-time developers with strong appraisals (limited options)
✓ Projects with clear profit margins (typically 20%+ on cost)

What you'll need

● Full development appraisal with cost breakdown
● Senior facility details (agreed or indicative)
● Planning permission
● Developer CV with track record of completed schemes
● Evidence of equity contribution (cash or land equity)
● Exit strategy and projected returns

FAQ

Frequently asked questions

Mezzanine finance is a form of subordinated debt, but it is structured specifically for development and investment projects. Unlike a standard second charge loan, mezzanine is governed by an intercreditor agreement between the senior and mezzanine lenders, defining priority of repayment, security, and consent rights. The terms are project-specific rather than generic.

An intercreditor agreement (ICA) is a legal document between the senior lender and the mezzanine lender that sets out the rules of engagement — who gets paid first, what happens in default, consent requirements for drawdowns, and how security is shared. Most established senior and mezz lenders have pre-agreed ICA templates, which speeds up the process.

Mezzanine sits behind senior debt in the repayment waterfall. If a project fails, the senior lender gets repaid first from the sale proceeds. The mezzanine lender only recovers after the senior debt is cleared — meaning they carry more risk. Higher rates (typically 12-18% per annum) compensate for this increased risk position. Despite the higher rate, the blended cost of senior plus mezzanine is often still very attractive compared to the return on equity achieved.

Not necessarily. Glender can help you source both senior and mezzanine simultaneously, or find a mezzanine provider who works alongside your existing senior lender. Some lenders on our panel offer "stretched senior" facilities that combine both tranches in a single facility, simplifying the structure. Your Generous Lender finds the most efficient route.

Some mezzanine providers offer lower headline interest rates in exchange for a percentage share of the project profits (typically 10-30%). This can improve cash flow during the project and reduce your total interest bill if the project performs to plan. However, if the project outperforms expectations, you share more of the upside. Glender presents both fixed-rate and profit-share mezzanine options so you can choose the structure that fits your risk appetite.

Most mezzanine providers want to see a minimum profit on cost of 20% or more. This buffer protects both the developer and the mezzanine lender — if costs overrun or sales values dip, there is enough margin to absorb the shock and still repay all debt. Projects with higher margins will attract better mezzanine terms and more competitive rates.

Mezzanine Finance — fill the funding gap