Mezzanine Financing Lets Your Investment Go Further
When you are looking to close on a real estate deal that conventional financing can’t quite cover, you need options that are built for serious entrepreneurs and investors. That’s where mezzanine financing comes in. This form of funding was originally conceived as a hybrid format that combines the advantages of sponsorship with financing that prevents too much dilution of the original entrepreneur’s equity.
Three Components of Mezzanine Programs
There are three parts that come together to make the funding work:
- Cash interest paid throughout the loan
- Payable in kind interest that is added to the principal
- A sponsorship agreement that allows the lender to claim the debt as equity by reverting it to an ownership percentage if the loan defaults
When you contact us for help setting up a mezzanine funding structure, we will take care of finding you the mezzanine deal that best fits your property. That’s just what we do at Exodus Commercial Capital.
Advantages of Mezzanine Financing
Traditional loans only cover properties up to a certain value before they maximize, and it isn’t usually possible to combine several loans to fund a large purchase. That’s where this kind of financing is helpful. It can connect you to the funding you need to take on larger projects than ever before with confidence.
Contact us today to start an application.