CrowdProperty today (March 31) launched CP Capital, a second-load mezzanine financing proposal.
The CP Capital product is available to SME developers who already have a senior development loan with CrowdProperty.
It offers between £50,000 and £1 million at 95% LTC and 75% LTGDV on loan terms of 3 to 24 months, and can be used for residential and mixed-use projects across the UK.
Mezzanine financing can be arranged at any stage of the development process – whether secured with senior debt upfront or after program completion, depending on when the developer needs additional capital.
For example, mezzanine financing can be used to assist in the purchase of a property to move into development, to cover additional costs incurred as a result of external factors or the completion of a project where the value has already been created.
By combining senior and mezzanine financing into one package, CrowdProperty offers a single point of contact to liaise with throughout the project, a set of professional fees, and the same due diligence process, if started in conjunction with senior loan.
In an exclusive interview with DFTMike Bristow, CEO of CrowdProperty (pictured above), said the company expects to fund more than £20million in mezzanine loans over the next year.
Mike explained that the new offering was born out of customer demand and the company’s desire to meet developers’ needs for additional specialized funding.
“Having disrupted the market to address the challenges of securing senior development finance by supporting £450m of property projects to date, CrowdProperty is now able to meet the additional funding needs of UK property developers by offering Mezzanine financing through our CP Capital product line, bringing senior and junior finance under one roof, with powerful benefits for developers.
“The unique and overriding aspect of our entire business is that it’s owner-financed real estate, and that’s very much at the heart of this mezzanine product, as it is with our senior debt financing.
“Over the past two decades, the housing construction output of SME developers [has fallen]and the biggest problem is the supply of financing.
“That’s why we’re developing our technology to work to provide better financing to SME developers so they can build more homes – that’s our core mission.”