Senior Debt Development Finance
Secure all the finance you need to make your development project a success using Pure Property Finance’s senior debt services.
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What is Senior Debt?
Senior debt, often referred to as a senior note or senior loan, is money borrowed which has seniority over other loans and must be repaid first should the borrower feel the pinch. Junior or subordinated debt would follow in priority.
As senior debt has the highest priority for repayment, it is often seen as lower risk and tends to carry lower interest rates as a result. This makes it highly desirable for many developers.
Senior debt is typically secured with collateral, such as a lien against a property.
What is a Senior Debt Covenant?
A senior debt covenant is an agreement between the borrower and the lender, which can put restrictions on the borrower for the extent of the senior debt loan period. For example, the lender may specify certain development stages must be met before other activity can be carried out.
If the covenant is not abided by, the lender has the right to rescind the loan and demand immediate repayment, so it is important to check you’re comfortable with any covenants before taking out a loan.
Why Use Senior Debt?
Designed specifically for development projects, senior debt can provide all the finance you need to complete your project. It’s one of the cheapest forms of development finance, especially when you have a large deposit, and generally, lenders see senior debt as a ‘safe investment’.
Whether you’re looking to develop residential property, commercial, or mixed use, the team here at Pure Property Finance can help secure you the senior debt you need to make your project a reality.
- First charge loan
- Up to 65% of GDV or 80% of project costs
- No profit share
- Adverse credit options considered
Stretched Senior Debt Finance
If you’re looking for finance at a high loan to cost or loan to value percentage, then stretched senior debt could provide you with the leverage.
Every project is different and as such you deserve to have a mezzanine finance package that is absolutely tailored to your individual wants and needs.