Mezzanine finance provides a second layer of debt funding to fill the gap between the level of senior debt (which would typically be provided by a bank or fund) and the developer’s own equity investment into a property development transaction. It is typically secured via a second charge. We solely provide loans to companies for business purposes only, not to individuals.
The latest in Mezzanine Financing
Due to the reduction in senior lending in recent years, utilising mezzanine finance has become very popular and is routinely used in conjunction with senior debt. This type of finance is secured by way of a second charge and means a developer can minimise his contribution to just 5-10% of project costs. This will also significantly increase returns on equity invested by developers.
Example Funding Package for £10 million GDV Development
|Mezzanine Finance||£2.0 million|
|Senior Debt||£5.2 million|
FINNERTI is backed and funded by a range of High Net Worth Investors and funds, whilst also utilising our constantly evolving global portfolio of lenders including hedge funds, private banks, private equity funds and family offices throughout the market across the residential, student and hotel sectors.
Do we invest ourselves? Yes.
Do we do joint ventures? Yes.
Do we structure using external sources above? Yes.
We do this to ensure clients get the best overall funding solution, every time.
Revolutionary Property Finance
Our origination team fully appraise projects and produce a Funding Analysis Pack for every client. This Pack provides detailed modelling, cash flow analysis, the resulting impact upon equity returns, profits and includes sensitivity analysis. This importantly provides external investors with a highly technical third party independent review on the project and finance structuring.
The ‘visible’ lending market is actually a relatively small proportion of the entire investment market. Developers typically talk to a handful of funds which they know. Behind the scenes we are far more technical in our approach and have far greater reach.
Many developers have become used to funders offering ‘in fees’, ‘out fees’, ‘anniversary fees’, ‘asset management fees’, ‘rates’, ‘simple/compounding interest’ etc thus often end up choosing the – seemingly – ‘easiest’ option.
By extensively analysing the potential funding structures of a project and the implications of every single cost in a loan contract, we typically create savings for our clients of between £100,000 and £1m on projects.
These are significant amounts, yet people routinely go for the ‘easier’ option. Our role is to ensure that the process is as easy with us as it is as cost-effective.
Who Should Use FINNERTI
We welcome direct enquiries from developers. Brokers, introducers and IFAs should draw comfort from the fact we have completed over £200 million worth of funding and will ensure their clients get the cheapest possible rates on every project.
We pay repeat fees to introducers which means that as long as we keep delivering, they continue to receive fees.
If you are a property investor or developer, or have a client that is, you are in the right place.
Equity financing typically refers to the provision of capital through the sale of shares in a development project.
We have signed joint ventures with a number of developers ourselves as principals but that is largely where we are starting from scratch and seeding a new vision alongside our partners, in effect.
With equity requirements for specific projects of over £500,000 the equity itself comes from a discreet set of High Net Worth individuals, Family Offices and Private Equity Institutions to provide bespoke joint venture and equity finance for property developers and investors through the UK and parts of Europe.
We are flexible with our approach and can offer assistance to those with single or multi-unit projects. We will look at equity investments from £100,000 to £25,000,000.
FINNERTI identifies investment opportunities through meticulous analysis and detailed evaluation of the underlying asset to provide risk-adjusted returns for our investors.
FINNERTI is largely funded by high net worth private individuals.
Please contact us if you would like to discuss potential investments.