CrowdProperty enters mezzanine finance market

CrowdProperty has today (31st March) launched CP Capital, a second-charge mezzanine finance proposition.

The CP Capital product is available for SME developers who already have a senior development loan with CrowdProperty.

It offers between £50,000 and £1m at 95% LTC and 75% LTGDV on loan terms from 3-24 months, and can be used for residential and mixed-use projects across the UK. 

The mezzanine finance can be arranged at any stage of the development process — whether it’s secured together with the senior debt at the outset, or after the scheme is completed, depending on when the developer needs additional capital.

For example, the mezzanine funding can be used to help purchase a property in order to move to development, to cover additional costs incurred as a result of external factors, or on completion of a project where value has already been created.

By combining senior and mezzanine finance into one package, CrowdProperty offers one single point of contact to liaise with throughout the project, one set of professional fees, and the same due diligence process, if starting in conjunction with the senior loan.

In an exclusive interview with DFT, Mike Bristow, CEO at CrowdProperty (pictured above), stated that the company expects to fund over £20m of mezzanine loans over the next year.

Mike explained that the new offering was borne out of customer demand and the company’s desire to cater to developers’ needs for additional specialist finance.

“Having disrupted the market to solve the pains around securing senior development finance by backing £450m of property projects to date, CrowdProperty is now able to serve additional funding needs of UK property developers by offering mezzanine finance through our CP Capital product line, bringing senior and junior finance under one roof, with powerful benefits to developers.

“The overarching unique aspect of our entire business is that it’s property finance by property people, and this is very much at the core of this mezzanine product, as it is with our senior debt finance.

“Over the past two decades, housebuilding output from SME developers [has fallen], and the biggest pain there is finance provision.

“That's why we're building our technology to work towards delivering better finance to SME developers to enable them to build more homes — this is our core mission.”

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