Acquisition or settlement
Bridge a verified equity shortfall where the asset, planning position, senior facility and onward strategy are clearly evidenced.
MEZZANINE FINANCE · AUSTRALIA
Subordinated business-purpose property finance for eligible acquisitions, developments and completion strategies. Selected total capital stacks may be assessed up to 80% of lender-accepted value or GRV, with funding requests up to $50 million.
Equity gapComplete the verified capital stack
SettlementSupport an eligible acquisition
CompletionAddress an evidenced funding shortfall
RecapitaliseRestructure for an executable exit
A DELIBERATE LAYER OF CAPITAL
Mezzanine finance sits behind a senior facility and ahead of sponsor equity. It may improve capital efficiency, but it also carries higher risk and generally higher pricing than senior debt. The structure needs a realistic project margin, documented ranking arrangements and a repayment path that remains credible under downside testing.
We assess the whole capital stack—not the mezzanine request in isolation—so senior debt, interest, fees, security, equity and exit proceeds reconcile before a lender is approached. Compare the wider structure in our development finance assessment guide and net-funding example. The example distinguishes the gross facility limit from funds available for project costs; mezzanine funding requires its own assessment of pricing, priority and repayment.
Bridge a verified equity shortfall where the asset, planning position, senior facility and onward strategy are clearly evidenced.
Support an eligible project where remaining costs, contingency, programme, QS reporting and sales or refinance exit are documented.
Restructure existing debt or release limited sponsor capital where the revised stack improves delivery and preserves a viable exit.
Explore an initial equity-gap scenario. Subordinated funding in this tool is a simple input; its separate interest, fees and priority arrangements still need a complete capital-stack review.
UNDERWRITING THE WHOLE STACK
The lender must understand where its capital ranks, how much equity remains at risk and whether the project can repay both senior and mezzanine exposure.
Important: up to 80% is not a target or guarantee. It refers to selected total combined capital stacks, not an automatic standalone mezzanine LVR. Lenders may use the lower of value, GRV, cost or other metrics; apply interest reserves, fees, contingencies, presale hurdles and priority caps; require more equity; reduce the facility; or decline the application.
INITIAL CAPITAL-STACK CHECK
A mezzanine structure may warrant assessment where the senior position is clear, sponsor equity remains meaningful and the exit covers every layer of debt.
FROM GAP ANALYSIS TO SETTLEMENT
Share senior terms, valuation, feasibility, costs, equity invested, funding gap, programme and proposed exit.
Model combined leverage, interest, fees, contingency, priority, release mechanics, timing and repayment coverage.
The selected lender reviews borrower, security, legal, valuation, QS, senior consent, intercreditor and exit evidence.
Finalise senior consent, priority arrangements, security and conditions before funds are released for the approved purpose.
RANKING CHANGES THE RISK
Mezzanine capital can improve flexibility, but its subordinated position means stronger pricing, control and exit disciplines may apply.
| FEATURE | SENIOR DEBT | MEZZANINE FINANCE |
|---|---|---|
| Ranking | Usually first-ranking | Usually behind senior debt |
| Purpose | Core acquisition or development funding | Bridges a defined capital gap |
| Risk and pricing | Lower relative risk and pricing | Higher relative risk and generally higher pricing |
| Key documents | Facility and primary security | Facility, subordinate security and priority deed |
| Repayment | Paid before subordinate capital | Paid after senior debt under agreed waterfall |
WHAT TO PREPARE
Current evidence reduces uncertainty. Senior terms, valuation, feasibility, costs, equity, programme and exit should tell the same story.
Senior debtTerm sheet or facility agreement, drawn balance, undrawn amount, expiry, securities and lender contact
Valuation and feasibilityIndependent valuation or GRV, total development cost, cost to complete, contingency, margin and GST
Project deliveryPlanning, permits, build contract, QS reports, programme, presales, defects and remaining approvals
Sponsor positionOwnership structure, experience, track record, equity invested, financials, assets, liabilities and liquidity
Requested structureFunding amount, use of funds, proposed ranking, interest treatment, term and required settlement date
Exit evidenceSales schedule, release prices, refinance indication, settlement timing and downside sensitivity
FREQUENTLY ASKED QUESTIONS
These answers are general guidance. Every capital stack and lender policy is different, and no figure is an approval or offer.
It is subordinated business-purpose funding that sits behind senior debt and ahead of sponsor equity. It can help bridge a verified funding gap for acquisition, development, completion or recapitalisation.
The structure may involve a second-ranking mortgage, general security agreement, guarantees, share or unit security, or other agreed rights. It is normally governed by an intercreditor or priority deed with the senior lender. Exact ranking, standstill and enforcement terms are negotiated case by case.
Selected capital stacks may be considered up to 80% of lender-accepted value or GRV. This refers to total combined exposure, including senior debt, mezzanine debt, capitalised interest and applicable fees. The actual limit may be lower and approval is not guaranteed.
Funding requests up to $50 million may be assessed. The mezzanine component is sized after the senior facility, accepted value or GRV, verified total development cost, sponsor equity, project margin, interest reserve, security position and exit are reviewed.
Some structures allow interest to be capitalised into the facility or retained in an interest reserve; others require periodic payments. Capitalised interest increases total exposure and must be included when leverage and exit coverage are tested.
Common exits include project sales, refinance into a completed-stock or term facility, settlement proceeds, or another evidenced liquidity event. The lender tests timing, costs, release mechanics, downside sensitivity and whether the exit remains viable at maturity.
START WITH THE CAPITAL STACK
Tell us the senior position, value or GRV, total costs, equity invested, funding gap and proposed exit. We will explain the information needed, likely constraints and the next practical step.
Have the project location and stage, estimated value or GRV, total cost, equity invested, senior debt, additional funding required and proposed exit ready.
You will enter your details on our contact page. Do not include passwords, banking credentials or other highly sensitive information.
All finance is subject to lender assessment, due diligence and approval. Fees, charges and eligibility criteria apply.