Miel Financial works with a variety of lenders to offer high yield mezzanine loans on properties that require a second layer of financing. Mezzanine loans, which follow the senior loan and are in essence a second mortgage, are an effective way to finance more highly leveraged projects and help borrowers meet their complete loan requirements.
Because the mezzanine lender takes a more considerable risk, mezzanine loans typically have higher rates and points and will never have a term that is longer than that of the underlying senior loan. A senior lender must approve the use of a mezzanine loan, and, if they proceed, will enter into an Inter-Creditor Agreement with the mezzanine lender. This agreement outlines the rights of each lender and notates important information such as payment terms.
Mezzanine lending is appropriate for an individual that wants to put $1 million down on a $10 million shopping center. The borrower’s bank will lend $7 million at competitive rates, leaving the borrower searching for an additional $2 million in funding. Assuming that the borrower had good cash flow, a mezzanine loan might be secured to fill in the $2 million gap.
Contact Miel Financial today via email or phone 212-265-5626 to learn more about mezzanine lending and the types of programs we have available for borrowers. Especially if you are considering a mezzanine loan for a housing development, Miel Financial can help you through the complicated process of finding secondary funding that best suits your needs. You can also submit a scenario using our online web form. Miel Financial delivers expertise and competitive transaction options, even in todays challenging market conditions.