In my experience, most will, provided it's structured properly. A senior lender's main concern is what happens to their position if the project runs into trouble, and that's exactly what the intercreditor agreement deals with: it sets out who gets repaid first, what each lender can and can't do, and how things unwind if the project stalls. Get that document right and most senior lenders are comfortable with a second layer sitting behind them. It's the part we spend the most time on, because it protects you as much as it protects the lenders.

If your current senior lender won't entertain it at all, that's not the end of the road. Across our panel we can often find a senior lender who will, and on some deals a single lender who funds both layers, which sidesteps the intercreditor question entirely. It's one of the reasons the wider commercial property loans picture matters as much as the mezzanine piece on its own.

Most of the lenders we work with take a second mortgage over the property, sitting behind the senior lender's first mortgage. That ranking is the whole story: because they're second in line to be repaid, mezzanine lenders carry more risk than the senior lender, and that's what they're pricing for. On larger or more complex deals we sometimes see the security structured differently, through a charge over the project company or the developer's shares, but the principle doesn't change, the mezzanine sits behind the senior loan and ahead of your equity.

On most of the facilities we arrange, the interest is capitalised, rolled up and repaid at the end alongside the principal rather than paid month to month. That's deliberate: a development isn't earning income while it's under construction, so capitalising the interest keeps your cash free for the build. The catch to keep in mind is that rolled-up interest compounds, so it adds to the total you repay at exit, which is why we model it into the feasibility from day one rather than treating it as an afterthought.

Often, but not always, and we'd never answer it with a rule of thumb. The difference comes down to what each one actually costs you:

• Mezzanine is debt. You pay interest on the slice you borrow, repay it at exit, and keep full ownership and control.
• A joint-venture partner takes a share of the profit. On a strong project that share can cost far more than the finance would, and unlike debt, it's permanent, not repaid at the end.

On a project that's performing well, keeping the profit and paying for the money is usually the better deal. On a thinner one, a partner who shares the risk can be the safer call. We work this through against your actual numbers before either of us assumes mezzanine is the answer, it's the comparison this page is built around.

Usually there's a minimum term, and the lender charges interest for that period even if you're ready to repay sooner, that's how they make the deal worth doing. The good news is they rarely come with the complex break costs you'd see on a traditional loan. Some lenders are more flexible than others, so when we know an early exit is on the cards we'll push for terms that allow for it during structuring. The thing that makes the biggest difference is telling us your likely exit timing up front, so we can build the facility around it rather than have it work against you. If the gap you're funding is genuinely short-term with a near-term exit, it's also worth checking whether bridging finance is the cleaner fit.

It comes down to who's providing it. The institutional funds we deal with tend to focus on larger projects and write bigger mezzanine pieces, while private credit lenders and family offices are often happy with smaller amounts on mid-size projects. On smaller developments, we'll frequently look at a single lender funding both the senior and mezzanine layers, which keeps it simpler and cheaper to run. So rather than rule yourself in or out on size alone, it's worth a quick chat, in our experience the right provider depends far more on the shape of the project than the dollar figure attached to it.

A mezzanine lender looks at the project as closely as they look at you, so the file has to tell the whole story. Here's what we'll usually pull together with you:

• A detailed project feasibility showing the margin and the end value
• Your senior debt approval or terms sheet, so the size of the gap is clear
• Evidence of your track record on past projects
• Company and personal financials
• A clear exit plan, whether that's presales, a refinance or a hold strategy
• Current project status, planning approval, the builder contract, any QS report

The part that earns its keep is how this gets packaged. Presenting it to the standard a mezzanine credit team expects genuinely changes how they read the deal, and it's work we'd rather do up front than have a lender form the wrong impression. Where you're funding the project end to end, the mezzanine usually sits on top of property development finance as the senior layer.

The quick fit check on this page will give you an indicative read in about 30 seconds, it weighs up the project, the size of the gap, your exit and your track record. It's not a credit decision, but it's an honest starting point.

For a real view, one that works off your actual numbers, talk to us. Smart Business Plans has arranged over $550 million in commercial finance for 3,300+ Australian clients, and we treat mezzanine as one tool among several. Sometimes the smarter answer is a senior restructure, more equity, or a different facility altogether, and if that's the case we'll say so. One thing worth doing early: because capitalised mezzanine interest has tax consequences when you exit, read the ATO guidance on interest and borrowing expenses and confirm the treatment with your accountant before you commit.