Private & short-term · mezzanine finance
Capital that sits between senior debt and equity.
Subordinated debt that ranks behind senior bank debt but ahead of equity. Common in property development and business acquisitions where the senior lender won't fund the full requirement. Higher cost than senior debt, often with warrants or profit participation.
What it is, when it fits
Plain English, with the trade-offs.
Mezzanine finance is subordinated debt that fills the gap between senior secured debt and equity in a capital stack. Mezz lenders rank behind senior debt for repayment in default but ahead of equity, accepting higher risk in exchange for higher returns. Pricing reflects this: 12% to 20% p.a. cash, often combined with warrants (rights to purchase equity) or profit participation (share of upside above an agreed return). Mezzanine is most common in property development (where it fills the gap between senior bank debt and developer equity) and business acquisitions (where it tops up senior LBO debt to deliver a feasible deal). Loan sizes $1M to $50M+, terms 2 to 5 years. Documentation is bilateral and bespoke; mezz lenders run their own underwriting, structure carefully around senior intercreditor terms, and demand robust exit strategies. Australia's mezzanine market is concentrated among specialist real-estate-focused funds (Wingate, MaxCap, Qualitas) and broader private credit funds with development capability.
Australian residential development under construction at dusk.
Typical scenarios
Property development capital stack completion
Why: Senior bank debt covers 60% of project cost; equity covers 25%; mezz fills the 15% gap.
Outcome: $3M mezzanine, 18-month term, 16% p.a. cash plus 5% profit share above hurdle return.
Business acquisition top-up financing
Why: Senior LBO debt covers 50% of acquisition price; equity covers 30%; mezz fills 20%.
Outcome: $5M mezzanine, 5-year term, 14% p.a. cash plus warrants on 5% of equity.
Growth capital without equity dilution
Why: Established business needs growth capital; equity dilution undesirable.
Outcome: $8M mezzanine, 36-month term, 13% p.a. cash with no equity participation, repaid from operating cashflow.
Refinancing complex capital structure
Why: Multi-layer existing capital stack restructured into clean senior + mezz.
Outcome: Mezzanine consolidates several junior facilities; senior debt simultaneously refinanced at better terms.
Lenders for this product
Who we work with.
- Wingate
- MaxCap
- Qualitas
- Stamford Capital
- Liberty Commercial
Lender accreditation varies; not every lender is available for every deal. We pick from the panel based on your specific situation.
How it works
From brief to settlement.
- 01
Capital stack assessment
We size the mezz layer against senior debt and equity, model total cost vs project economics before approaching mezz lenders.
- 02
Specialist fund shortlist
Five to six specialist mezz funds dominate the Australian market. We match deal profile (sector, size, security, exit) to fund mandate.
- 03
Negotiation and intercreditor
Mezz negotiations run alongside senior debt to align intercreditor terms. Documentation is bespoke; allow 4 to 8 weeks from term sheet to drawdown.
- 04
Drawdown and ongoing
Mezz facility goes live alongside senior; we support facility-level renegotiation if project scope or timing shifts materially.
Indicative pricing & terms
Ranges, not promises.
Rate range
12 to 20% p.a. cash + equity participation or warrants
Loan size
$1M to $50M+
Term
2 to 5 years
Security
Subordinated to senior debt; sometimes second mortgage, fixed and floating charge, equity-related security
Indicative only; specific pricing depends on lender, security, and your business profile.
Frequently asked
Honest answers, plain English.
Mezzanine vs senior vs equity?
Senior debt ranks first for repayment, lowest rate, conservative LVR. Mezzanine ranks behind senior, higher rate, often with equity-flavoured features. Equity ranks last, no fixed return, full residual upside. Capital stack design optimises across these layers.
Intercreditor arrangements?
Mezz lenders sit behind senior in priority but maintain rights (notice of default, cure rights, in some cases payment rights). Intercreditor agreements specify exactly how the senior and mezz interact in default; these are heavily negotiated.
Warrant and profit-share structures?
Many mezz deals include "kickers": warrants on equity (rights to buy equity at a strike price), profit participation (share of profits above a hurdle), or both. Structure depends on lender preference and developer or business owner appetite for dilution.
Exit triggers?
Mezz exits at term-end (refinance or asset sale), at acceleration (default), or sometimes at developer-driven optional payout. Most mezz facilities have minimum interest periods (12 to 24 months) regardless of early payout.
Development vs business acquisition mezzanine?
Development mezz: shorter term, asset-secured (second mortgage on the property), exit at sale. Acquisition mezz: longer term, business-cashflow secured, exit at refinance or trade sale. Different lenders and structures.
Capital stack design?
The art is matching layers to project economics. Too much mezz = unaffordable interest cost. Too little mezz = equity gap or undersized senior. We model the stack with you and the senior lender at origination.
Related products
If this isn't quite the fit.
Next step
Twenty minutes, no obligation.
Tell us the shape of the deal and the timing. We'll send a lender shortlist for mezzanine finance or, if it isn't the right fit, an honest signal of what is.