MOORE HOUSE (1)-ret copy

Services

Our funding explained
filter59 copy
mezzanine-icon

Mezzanine funding

Mezzanine finance is a form of top up funding to fill a gap between a developer’s equity and the amount that the Senior lender will provide. This is secured by having a second charge over the property in question, while the initial lender holds a first charge. By taking out mezzanine funding the developer is able to obtain a good return with minimum cash contribution. There are a number of benefits associated with pursuing this route, including:

  • Allowing capital to be split across several sites, meaning an increase in the number of projects that can be undertaken.
  • Allowing capital to be ‘freed up’ for the early funding of new sites.
  • Allowing developers to undertake larger schemes than would be possible with their existing capital.
  • Eases cash flow to allow developers to remain cash positive for new sites and monthly overheads.
  • Able to be used as a form of bridging finance.
  • No fixed criteria on LTV.

For further information on the options available, please contact us.

Senior debt

YTC INVESTMENT

Developer capital

Yellow Tree Capital will consider mezzanine funding between the value of £50,000 and £2,000,000 on residential development schemes, with a 1st or 2nd charge required. We can also offer assistance on securing senior debt at very competitive rates.

Untitled 3 copy 3
ventures-icon

Joint Ventures

Alongside our mezzanine funding, we also provide joint venture funding for residential developments, where we typically work with builders, developers and contractors.

In this instance, Yellow Tree Capital will share in the capital investment, and can help to arrange the senior debt at very competitive rates.

The key points to note surrounding this method of funding include:

  • Profit share is agreed between both parties, with no interest charged on the investment by Yellow Tree Capital.
  • Yellow Tree Capital will offer its expertise and team to assist with sales and marketing, allowing partners to focus on construction.
  • Unconditional site purchases will be considered (with an option to share in pre-planning costs)
  • Sites that are subject to planning or have planning permission are preferred.

Senior debt

YTC INVESTMENT

Developer capital

Yellow Tree Capital are prepared to consider one-off joint ventures, as well as investing in building new regional housing brands.

Untitled 3 copy 3
investment-icon

Investments

Yellow Tree Capital is building a portfolio of its own rental investments, and will consider the following:

  • Bulk purchases or forward purchases of new build stock
  • Leaseback deals (typically to include showhomes)
  • Tenanted rental portfolios
  • Purchases of distressed or unfinished stock
  • Apartments and houses will be considered
  • Commercial and mixed-use schemes will be considered
  • South East locations preferred

For further information on the options available, please contact us.