A development finance broker plays a vital role in helping developers understand & structure senior and mezzanine finance effectively. These two funding layers are commonly used together to maximise leverage while keeping projects financially viable.
Senior finance is the primary and lowest-risk funding layer. It is secured against the development asset and typically offers the lowest interest rates. Senior lenders focus on location, planning consent, developer experience, and gross development value (GDV). A development finance broker helps position the project to meet these criteria, improving loan-to-cost ratios and approval speed.
Mezzanine finance sits behind senior debt and provides additional capital where senior funding alone is insufficient. While more expensive, mezzanine finance allows developers to reduce equity contributions and unlock higher-value projects. Because it carries greater risk, lenders require robust appraisals and a strong exit strategy.
A development finance broker ensures both layers work together smoothly. They negotiate intercreditor agreements, align repayment terms, and manage lender expectations across all parties. Brokers also advise when mezzanine finance is appropriate—and when it could overstretch a project.
By structuring senior and mezzanine finance correctly, a development finance broker helps developers balance leverage, risk, and profitability. This expertise is essential for delivering complex developments on time and within budget.
