We are independent and work with a range of UK lenders many of whom are specialist lenders that are not available on the high street. We pride ourselves on providing excellent service responsive to your needs.
Traditionally, property developers use a combination of their personal capital and the finance available from banks or specialist lenders to fund their projects. However, there are times when lenders do not provide the necessary funding required for property developers to complete their development.
Due to the reduction in senior lending in recent years it has become common place for there to be a shortfall between the budget and the total cost of development. This has become a frequent problem for property developers. As a result, in today's rapidly changing economic landscape, it is becoming more common to have structured financings consisting of various components. Developers are constantly looking for additional ways to fund their projects.
In the event that there is a shortfall in funding, mezzanine finance provides an option for property developers to source further finance to ‘plug’ the gap.
Mezzanine financing acts as a second charge behind the main lender for the development. By providing additional funding, it allows property developers the freedom to minimise the amount of personal capital tied up in a project. This enables developers to invest in multiple development projects at the same time.
The majority of mezzanine finance providers will offer up to 20% of the gross development value. Therefore, the portion of funding is usually as follows :
Mezzanine finance is used by property developers when there is a shortfall in funding. This is when the property developer does not have the sufficient funds to complete their project.
Mezzanine funding is usually required to be invested into the development on the first day of the project to contribute to the purchase. Therefore, it is advisable to contact a specialist property finance broker to source the best deal available.
Mezzanine funding can be used for a variety of different types of building projects and it is regularly used by property developers:
Mezzanine financing differs from other types of loans because of the flexibility it affords the borrower. Through mezzanine funding borrowers can secure the necessary funding and arrange a repayment plan that suits them.
Mezzanine loans are a popular source of finance:
It is important to note that mezzanine loans are provided when the lender can see a high chance of return. This is because mezzanine finance providers take on a certain amount of risk that other lenders do not.
As a result of the additional risk, mezzanine finance typically will have the one or both of the following:
Mezzanine development finance can include high interest rates or an agreement for profit sharing, but it is a valuable tool to free up developers’ capital. Developers appreciate this, as the more capital available the more they can take advantage of investment opportunities, which ultimately creates more avenues for additional income.
Although the majority of mezzanine finance borrowers are property developers, mezzanine loans are not available to all developers. Mezzanine finance providers restrict their lending to experienced property developers with a strong portfolio of successful projects. This is to ensure that the probability of repayment is high.
As a result of this, mezzanine finance providers rarely offer mezzanine loans to new or inexperienced property developers. This is because it is too risky for a lender to provide additional finance to a developer that has no experience or track record of successful projects, as the probability of repayment is low. In the unlikely event that a mezzanine finance provider grants a mezzanine loan to an inexperienced developer, it is likely that the interest will be a lot higher than a standard mezzanine loan.
An alternative route to source finance for new or inexperienced property developers is through a specialist broker to arrange a joint venture. This is where an experienced property developer or high net worth earner invests in the inexperienced property developer’s project.
Arranging mezzanine finance without professional assistance can be a long and drawn out process, with no guarantee of success. This is because almost all mezzanine finance providers solely deal with professional finance brokers in the financial service industry. When developing a property, organising adequate finance can be lengthy and complex. In the event that mezzanine finance is required, it is advisable to contact a specialist property finance broker to ensure that the mezzanine loan is appropriate, with fair terms and at the best available rates.
Luther was excellent. Very clear in his advice and explanations of products and was able to move things on very quickly when we ran into difficulties with the estate agents. Without a doubt I would recommend Luther to all friends, family and colleagues. Luther was a joy to deal with and took a lot of the stress out of a troublesome transaction, from my end. I would view Luther as real asset to Clifton Private Finance Ltd.
The team at Clifton Private Finance has been outstanding, not only in helping me to obtain a mortgage on a slightly unusual home, but also in continuing to provide support and liaise with the lender and solicitors through to completion. Thank you for making the process of buying my first home much easier.
Sam O'Neill, and the new lender he identified for me, worked tirelessly together using my time constraints, to make sure my mortgage application was completed on time. They are a brilliant company to work with, fast, efficient, open and transparent from the very beginning, and turned a seemingly impossible situation into a viable one. Sam was brilliant throughout the whole process and I would highly recommend him, and his colleague Helen, to anyone without hesitation, I cannot speak highly enough about them.
I was incredibly lucky to find Clifton Private Finance after a search on line as their service has been more than exemplary. My point of contact was Sam 0’Neill and he was happy to help at every stage during the application of the bridging loan, making a stressful process much easier to deal with. He was always available by phone or email and gave prompt answers to queries I had as well as always getting back to me when he said he would. That to me is excellent customer service and I cannot thank him personally or the company enough for the support they have given me.
Adam cannot thank you enough for all your support throughout this arrangement. You have gone more than the extra mile to support us. Without you we would not have got our dream retirement home. You have been most professional and personable. Liz and I would be more than happy if you wanted to use us a reference with respect to any future clients.
Nigel & Liz K - Bristol
You have certainly shown me that you do everything for your clients, including tolerating their excessive emails and questions for updates. I have been kept in the loop, from yourself, about why the delays were occurring (Nationwide, post etc) which I would like to highlight that I really appreciated. I certainly will be able to recommend you to others as and when the need arises.
I recently contacted Clifton Private Finance after a Google search for bridging finance providers and was immediately struck by their efficiency and support. Forms were emailed over almost immediately and the necessary finance was arranged within a few days. None of the other companies I contacted came close to their professionalism, and the quote that I eventually received was impressive. Thank you Adam, your help has enabled us to reserve the house that we wanted and I certainly recommend you to others.
Mr M. R. - Oxford
Absolutely brilliant. The service was first class, got everything sorted efficiently and were always friendly. Any fees were negligible compared to the service offered. Robert was particularly outstanding.
My advisor, Robert, was very helpful in finding the mortgage to suit me. He kept me up to date throughout the process and dealt with any issues when they arose.
I have received fantastic service from your company from my first moment of contact. Adam Arnott has been dealing with my application and has kept me informed throughout the normally stressful process.