Horizon Financial
Commercial Loans
Mezzanine finance for more flexibility
Mezzanine finance gives you the flexibility to engage in development projects without tying up your company's tangible assets. It is secured only by the equity of your company, and not your assets like property, cash or accounts receivable.
As a source of capital, mezzanine finance is more expensive than normal secured debt. This is due to it being a greater credit risk. In the event of a default, mezzanine finance debt is less likely to be repaid in full. That's why mezzanine finance asks for higher interest rates or an equity stake in your company.
However, the great advantage of mezzanine finance is that you're getting working capital without having to give away equity in your company to raise the money. You keep control.
When to use mezzanine finance
Typically there are three main uses for mezzanine finance.
- If you have a young company without sufficient assets to offer as collateral for a loan you can apply for mezzanine finance.
- If you want to finance a leveraged buyout while reducing the amount of your current investment.
- If you have a medium size company and want to move onto large scale development projects, mezzanine finance can provide between $1 million and $30 million to finance your venture.
To help structure your mezzanine finance, speak to an expert at Horizon Financial.
A development loan that means more than money
When you want to finance a development, the development loan needs to be structured to maximise your end profit and minimise your interest payments. That's why various types of development loan have to be carefully considered.
We'll show you all the options. Your development loan can finance subdivision fees, construction costs and marketing spend. Depending on your project, you might need to build in an element of flexibility to your development loan, allowing you to deal with any unforseen hurdles or delays.
Maximum leverage, maximum returns
We can usually arrange a development loan for up to 70% of the gross realisable value of the property, or up to 100% on the total development cost depending on the overall strength of the transaction eg presales/experience/equity. If more is required we can arrange Mezzanine Finance.
Our expertise in structuring a development loan that's exactly right for your project ensures you avoid the stumbling blocks sometimes associated with dealing directly with the banks. You get your finance when you need it and at a rate that maximises your return on equity.
Call us now and find out how we can help.