CrowdProperty launches mezzanine finance brand
CrowdProperty has launched a new finance product line called CP Capital, which will focus on providing second-charge mezzanine finance for property developers.
The mezzanine finance offered via CP Capital will allow property professionals to access project funding that has not been not met by the senior debt finance market.
Senior debt typically accounts for between 75 and 80 per cent of total costs, while mezzanine finance can top this up to cover up to 95 per cent of costs, CrowdProperty said.
Loan terms will last from three to 24 months, and loan values will range from between £50,000 and £1m, depending on the scope of the project and the status of the existing capital stack.
Would-be borrowers must have at least five years experience in property development, and planning permission or permitted development plans should be in place.
Rates are expected to work out at between 1.33 per cent and 1.83 per cent per month, depending on the level of debt, project economics and developer experience.
CP Capital will support projects at any stage, from property purchase, to renovations, to raising funds to help bring a project to completion. It is backed by the same team behind CrowdProperty.
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“CrowdProperty’s founders have a mission to transform property finance, stemming from their own experiences of the development finance market which had let down small and medium sized developers for years,” said Mike Bristow (pictured), chief executive of CrowdProperty.
“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.
“This is yet another way in which CrowdProperty strives to deliver an exceptional customer experience, enabling developers to work with a single capital provider across their projects and capital requirements.”
This is CrowdProperty’s first foray into second-charge financing. Since the company was founded in 2014 it has focused primarily on senior, first charge development funding to property developers.
Earlier this week, CrowdProperty was named the third largest P2P lender in the UK in terms of lending volumes following an analysis by Innovate Finance’s 36H Group. The platform was also singled out as one of the few platforms to grow its loan volumes in both 2020 and 2021, with lending volumes approximately 150 per cent higher in 2021 than they were in 2019.
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