Get Mezzanine Finance from $2m to$ 50m+

Reduce equity requirements by 60-70% with strategic mezzanine finance from $2M to $50M+. We help structure subordinated debt solutions through institutional funds and private credit providers, helping you maintain ownership while achieving up to 40%+ ROE.

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Mezzanine finance

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Mezzanine Finance Summary

Mezzanine Finance - Quick Overview

Pricing & Returns

  • Interest Rates: 12-20% p.a. typical
  • Arrangement Fees: 2-4% of facility
  • Total Funding (LTC): 85-95% combined stack
  • Facility Term: 12-36 months typical

Capital Structure

  • Senior Debt: 60-70% of costs
  • Mezzanine Layer: 15-25% of costs
  • Equity Required: As low as 5-15%
  • Payment Structure: Rolled-up or PIK

Deal Requirements

  • Minimum Size: $2M+ mezzanine tranche
  • Project IRR: 20%+ target returns
  • Sponsor Strength: Experienced developers
  • Exit Strategy: Clear refinance or sale
Quick Links:
Mezzanine Types | Rates & Terms | Finance Stages | IRR Calculator | FAQs

All information is general guidance only. Your actual rates and terms might be different. Not financial advice. Please read our important disclaimer.

Get Mezzanine Finance For Your Project

Mezzanine finance bridges the gap between senior debt and equity, unlocking 85-95% of total project costs when traditional lenders cap out at 70-80%. It’s the sophisticated funding layer that lets developers preserve equity while accessing the capital needed to execute ambitious projects, without diluting ownership or bringing in joint venture partners.

Successful mezzanine deployment requires three critical elements:

  • Precise capital stack optimisation and IRR modelling
  • Securing competitive pricing across senior and mezzanine tranches
  • Structuring intercreditor agreements that protect all parties

Our direct relationships with mezzanine providers can mean access to institutional pricing, streamlined due diligence, and intercreditor terms typically reserved for tier-one developers. Book a free 30 min consultation to explore how mezzanine finance can enhance your project returns.

Mezzanine Finance Key Indicators

Who Uses Mezzanine Finance?

Institutional Developers Maximising leverage on flagship projects while preserving equity - achieving 20-30% IRR through strategic capital structuring
High Net Worth Syndicates Pooling sophisticated investor capital with mezzanine leverage - targeting premium returns without diluting control or profit share
Private Equity & Fund Managers Deploying mezzanine within complex capital stacks - optimising returns across multiple projects while maintaining portfolio flexibility
mezzanine finance

We help structure deals from $2M to $50M+ in mezzanine tranches, supporting everything from boutique developments to landmark commercial projects.

  • Institutional mezzanine funds – Competitive pricing for $5M+ requirements with proven sponsors
  • Private credit funds – Flexible terms for complex projects and shorter timeframes
  • Family offices – Patient capital with bespoke structuring capabilities
  • Specialist property lenders – Integrated senior and mezzanine facilities from single sources
 
Contact Smart Business Plans
Mezzanine Finance Scenarios $2M-$50M+ | Strategic Capital Solutions

Strategic Mezzanine Finance Solutions

Unlock Capital Efficiency with Subordinated Debt Structures

Bridge the Equity Gap

$2M - $20M typical

  • Senior debt capped at 65-70%
  • Preserve cash for other projects
  • Avoid diluting ownership
  • Example: $10M project, $7M senior, $2M mezz

Accelerate Multiple Projects

$5M - $50M+ portfolio

  • Deploy capital across 3-4 developments
  • Maintain diversified portfolio
  • Maximise IRR on equity
  • Leverage $5M equity into $50M projects

Reduce Pre-Sales Hurdles

$3M - $30M facilities

  • Proceed with minimal pre-sales
  • Start construction sooner
  • Capture rising markets
  • Launch with 0-20% pre-sales vs 50%

Avoid Joint Ventures

$2M - $25M tranches

  • Maintain 100% ownership
  • Keep full development profit
  • Control all decisions
  • Pay 18% p.a. vs giving 50% profit

Stretch Senior Limits

$2M - $40M mezzanine

  • Banks cap at conservative LVRs
  • Complex projects need more
  • Non-standard developments
  • Access 85-95% total funding

Opportunistic Acquisitions

$2M - $50M+ deals

  • Quick settlement requirements
  • Competitive bid situations
  • Off-market opportunities
  • Fast approval in 5-10 days

Exact rates vary based on your personal circumstances and project risk profile. Not financial advice. Talk to our team for an accurate quote.

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Mezzanine Finance Rates, Terms & Fees Australia

Mezzanine Finance Rates, Terms & Structures

Rate Range
12-20% p.a.
Total LTC
85-95%
Facility Term
12-36 months
Minimum Size
$2M+
Project Scenario
Typical Rates
Total LTC
Terms
Key Features
Residential Development
12-15%
85-90%
12-24m
Minimal pre-sales • Rolled-up interest • Clear exit
Commercial Projects
14-18%
85-90%
18-36m
Tenant pre-commitments • Higher yields • Refinance exit
Land Banking
15-18%
80-85%
12-18m
Strategic acquisitions • DA upside • Capital preservation
Opportunistic Deals
16-20%
90-95%
6-12m
Fast settlement • Minimal equity • Bridge to refinance
Distressed/Special Situations
18-25%
75-85%
6-12m
Workout scenarios • Rescue capital • Turnaround funding
Senior Debt
60-70%
Mezzanine
15-25%
Equity
5-15%
Blended Cost
8-11% p.a.
Capital Layer
Typical Range
Key Terms
Senior Debt (1st Mortgage)
60-70% of costs
5-9% p.a. • First ranking • Bank or non-bank
Mezzanine (2nd Mortgage)
15-25% of costs
12-20% p.a. • Second ranking • Rolled interest
Preferred Equity
10-20% of costs
15-25% IRR • No security • Profit participation
Developer Equity
5-15% of costs
25-40% target IRR • Last in, first out
Total Project Funding
85-95% LTC
Blended cost 8-11% • Multiple tranches

Intercreditor Agreement: Defines payment priority and rights between senior and mezzanine lenders

Payment Structure: Most mezzanine interest is capitalised (PIK) and paid at exit

IRR Enhancement: Using mezzanine can boost equity IRR from 25% to 35-45%

Exit Requirements: Clear refinance or sale strategy essential for mezzanine approval

Provider Type
Rate Range
Best For
🏛️ Institutional Funds
12-15% p.a.
$5M+ deals, proven sponsors, flagship projects, lowest rates
💼 Private Credit Funds
14-18% p.a.
$2-10M deals, flexible terms, complex structures, mid-market
🏢 Family Offices
15-20% p.a.
Bespoke structures, patient capital, relationship-driven, long-term
⚡ Specialist Lenders
16-22% p.a.
Fast execution, minimal requirements, bridge funding, opportunistic
🔧 Integrated Providers
Combined 8-11% blended
Single source senior + mezz, simplified process, one relationship

Deal Size Matters: Institutional funds typically require $5M+ mezzanine tranches

Speed vs Price: Faster approval usually means higher rates (2-3% premium)

Relationship Value: Repeat sponsors often secure 1-2% rate discounts

Structure Flexibility: Some providers offer equity kickers to reduce cash rates

Exact rates vary based on your personal circumstances and project risk profile. Not financial advice. Talk to our team for an accurate quote.

The 5 Mezzanine Finance Stages | Strategic Capital Structuring

The Five Mezzanine Finance Stages

1
Capital Stack Assessment
Analyse senior debt limits, identify funding gap, model IRR enhancement, determine optimal mezzanine size.
2-3 days initial review
2
Terms Negotiation
Secure indicative terms, compare providers, negotiate rates, agree intercreditor principles with senior lender.
1-2 weeks to terms
3
Due Diligence & Approval
Feasibility verification, valuation review, sponsor assessment, credit committee approval, formal offer issued.
2-3 weeks diligence
4
Documentation & Settlement
Execute loan agreements, finalise intercreditor deed, register second mortgage, coordinate simultaneous settlement.
1-2 weeks to settle
5
Exit & Repayment
Project completion, sale or refinance execution, senior debt repaid first, mezzanine plus rolled interest repaid.
12-36 month terms
💡 Important for Sophisticated Investors:
Mezzanine finance typically features capitalised interest (PIK) throughout the term, maximising cash flow for project execution. The intercreditor agreement is critical - it defines payment waterfalls, step-in rights, and enforcement procedures between senior and mezzanine lenders. Most mezzanine providers require proven developer track record and 20%+ project margins. Exit strategy must be robust as both senior and mezzanine debt require repayment simultaneously.

Exact rates vary based on your personal circumstances and project risk profile. Not financial advice. Talk to our team for an accurate quote.

Mezzanine Impact Calculator

See how mezzanine finance boosts your development returns

All development costs

Before finance costs

Total project duration

First mortgage rate

Second mortgage rate

% of total costs

Without Mezzanine

Senior Debt $0
Equity Required $0
Finance Cost $0
Net Profit $0
0%
Return on Equity (p.a.)
Enhanced Returns

With Mezzanine

Senior Debt $0
Mezzanine $0
Equity Required $0
Total Finance Cost $0
Net Profit $0
0%
Return on Equity (p.a.)

Mezzanine Finance Impact

0%
Less Equity Required
+0%
ROE Improvement
$0
Cash Preserved
0x
IRR Multiple

Disclaimer: This calculator is provided for illustration purposes only and does not constitute financial advice or a loan offer. Calculated figures are estimates only, may be inaccurate, and do not reflect actual lender terms or fees. Actual loan amounts, rates, repayments, and eligibility will vary based on your specific circumstances and lender assessment. Do not base any financial decisions on this calculator. Contact our team for a tailored quote.

Mezzanine Finance Success Stories | Real Developer Case Studies

Examples of outcomes that can be achieved

Achieve superior returns with strategic capital structuring

Townhouse Development

$12M Project

"Mezzanine finance let us start with zero pre-sales. Reduced equity from $3.6M to $1.2M, achieving 42% ROE instead of 25%."

Equity Saved: $2.4M
ROE Boost: +17%

Mixed-Use Development

$35M Project

"Banks capped at 65%. Mezzanine took us to 85% funding. Freed up $7M to run two projects simultaneously. IRR jumped from 22% to 38%."

Total LTC: 85%
Projects: 2 Active

Apartment Complex

$28M Project

"Avoided JV partner wanting 50% profit share. Paid 16% on mezzanine instead. Kept 100% ownership and saved $2.1M in profit share."

Ownership: 100%
Profit Kept: $2.1M
Talk to our expert team
Mezzanine Finance Application Process | 3 Simple Steps

Ready to get started? Our 3-Step Mezzanine Process.

Get our team to structure the optimal mezzanine solution for you.

1

Assess Capital Stack

Free Strategy Session

We analyse your project's capital requirements, senior debt limits, and IRR targets. We'll model how mezzanine can enhance your returns and preserve equity.

  • ✓ Model optimal capital structure
  • ✓ Calculate ROE enhancement
  • ✓ Identify best mezzanine providers
2

Negotiate Terms

Expert Structuring

We negotiate with institutional funds, private credit providers, and family offices to secure optimal pricing and terms. We manage intercreditor agreements with your senior lender.

  • ✓ Competitive rate negotiations
  • ✓ Intercreditor coordination
  • ✓ Flexible exit terms
3

Fast Settlement

2-4 Week Timeline

We coordinate documentation between senior and mezzanine lenders for simultaneous settlement. Post-settlement, we monitor your exit strategy and refinance opportunities.

  • ✓ Documentation management
  • ✓ Simultaneous settlements
  • ✓ Exit strategy support
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Benefits of working with us

Stronger Application

We'll work with you to develop a strong application profile, improving your chances of a successful application. We'll also call out any issues or gaps early. Your business plan and cash flow projections are also include

Best Possible Terms

We compare multiple lenders and present suitable options from our extensive development finance lender panel. We consider loan features like rates & terms, payment flexibility and approval timeframes. 

Help Avoid Mistakes

We help you avoid the common mistakes people make every day. From getting stuck with high rates to having loan applications rejected because the information wasn't structured the right way for the lender.  

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Frequently asked questions

We find that many senior lenders are comfortable with mezzanine if it’s properly structured. We can help negotiate intercreditor agreements that protect both lenders’ interests. If your current bank won’t accommodate mezzanine, we have relationships with 60+ lenders, many of whom will be happy to review your needs. In some cases it’s possible to find lenders that will offer to integrate senior and mezzanine facilities from a single source, eliminating intercreditor issues entirely.

The typically application documents require for mezzanine finance include a detailed project feasibility showing at least a 20%+ profit margin, a senior debt approval or terms sheet, any evidence of development experience (past 3-5 projects), your company and personal financials, and a clear exit strategy (pre-sales, refinance, or hold plan). Current project status (meaning DA, construction contract, QS report etc) may also be needed. We can help package everything to institutional standards.

Most mezzanine facilities we work with have minimum terms (which are typically 6-12 months), with interest charged for that period regardless of any early repayments. Unlike traditional commercial loans though, there are usually no complex break costs. Some providers offer more flexibility with monthly interest payments allowing earlier exit. We negotiate the most flexible terms possible during structuring.

It depends. While mezzanine rates (12-20% p.a.) might seem high at first glance, the total cost is often less than giving away 50% of profits to a JV partner. For example, on a $3M profit project, 16% mezzanine might cost $400K in interest, while a 50/50 JV costs $1.5M in profit share. And don’t forget, you maintain 100% control and ownership. Mezzanine is debt that gets repaid, not permanent equity dilution.

Most institutional mezzanine funds require minimum tranches of $5M, which are generally suitable for projects around $20M+. However, some private credit funds and family offices can work with $2-3M mezzanine pieces for $10M+ projects. For smaller developments, integrated senior and mezzanine facilities from specialist lenders may be more suitable. We can help you match to the right lender based on your project size.

Book Your Free Consultation
Book Your Free Consultation
Call 1300 262 098
Call 1300 262 098
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