When a senior loan and mezzanine loan don’t go quite far enough, and you need to borrow more to make the project work.
Fortunately, there is a growing appetite amongst lenders to provide equity into development deals.
Such loans are ideally suited to those clients that run multiple sites simultaneously, or clients wanting to take on bigger sites, or simply if you’re getting started in your development career.
The mezzanine market will go to 90% LTC. With equity loans you can go as high as 100%, but most lenders will want to see a small percentage, perhaps 2%-4% of client equity.
The majority of lenders charge an interest rate and a part profit share, but a well-structured deal means you can just get on with your development.
Why choose PFG for your Equity for Development Finance?
Most brokers don’t know this market, and it’s predominately made up of equity funds and high net worth investors. Some are very reputable and some are not, and we will tell you the difference.
These deals are bespoke, so having a broker that can negotiate and knows the difference between a good deal and a bad deal is key. Yes the lender is taking higher risk, but you’re the one doing all the heavy lifting, so don’t give away a bigger profit share than you need to.
Competition for this type of funding is high, so the right presentation is key. If you have the development experience, and the right site with good profit margins, then we can do the rest.
