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Are you looking for Mezzanine debt finance for your property development?

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Getting funding for an upcoming project is never an easy ordeal. Property developers and builders have to work hard to secure funding for their upcoming projects, especially during these unprecedented times of Covid-19. Obtaining funding is especially hard for small developers and builders as the market is dominated by high-end developers and big-time builders. Of course, factors such as the rising cost of land and the strict lending criteria do not make it any easier for small developers and builders to secure financing. If you are looking for Mezzanine debt finance for your property development, here is everything that you need to know. 

What is Mezzanine debt finance?

First, let’s talk about Mezzanine debt finance. When a builder or a development company has fully utilised their debt borrowing capacity or looking to preserve their senior debt for the future, the builder or developer will need to look for an additional source of capital. This capital could be used for growth opportunities such as starting new projects or taking over ongoing projects and distributing among shareholders, and in some cases, buying back shares from shareholders. This is when developers need to start raising finance for property development.

Equity vs Mezzanine debt finance

Now, there are two options. One option is to raise more equity, which means that the builder or developer has to further dilute their share in order to get funding. The second, and more viable option, is Mezzanine financing. Mezzanine debt is used to bridge the gap between equity financing and debt. In simpler terms, think of Mezzanine financing as a more expensive form of debt or a cheaper form of equity. Since it is a more affordable form of equity, the interest rate is higher while the overall cost of capital is lower. Mezzanine debt financing allows a developer to get the highest return on investment while putting in the least amount of capital.

Let’s say a high-end builder wants to take over an ongoing project that has £20 million in debt, but the builder does not want to put up their capital. So, the builder will look for Mezzanine financing to cover around £15 million while the builder will only have to invest £5 million from their capital. Since the builder used Mezzanine debt financing, it will be possible to convert the debt into equity only once certain criteria are met. However, this allows the builder to reduce the amount of capital required to complete the transaction and eventually allows the debt to convert into profitable equity.

Tools for Mezzanine debt finance 

For builders and developers who are looking for Mezzanine debt financing, technology is a great boon! Now, there are so many online tools that have made the process of securing funding so much easier. Sqft.Capital is one such company that works as an online finance raising tool for property developers and provides mezzanine debt for property developers! Sqft.Capital is a platform that has been created for UK property developers to model their deals, raise debt and equity, secure funding and optimise profits seamlessly.

The average debt raise request for Sqft.Capital is £2,945,179, while the average mezz raise request is £1,088,745. The average equity raise request is £688,211, and the average GDV projects that this company raises funding on is £4,640,130. This platform allows builders and developers to use free tools to model a financial projection and then puts all the data together to make it look presentable for lenders. Once the model is ready, Sqft.Capital finds the best financing options for the upcoming project, which either have the highest profit or require the least amount of equity. 

Why choose Mezzanine debt finance? 

One important reason that developers should opt for Mezzanine debt financing is that it allows them to increase their internal rate of return. Also, since the developers do not have to give up equity, they have complete control over their projects and businesses. Usually, when developers get more equity partners on boards, things can get messy. Additionally, the main chunk of mezzanine finance is payable as an exit fee when the loan is redeemed, which means most of the cost is a charge on profits.

The idea of Bigtime Daily landed this engineer cum journalist from a multi-national company to the digital avenue. Matthew brought life to this idea and rendered all that was necessary to create an interactive and attractive platform for the readers. Apart from managing the platform, he also contributes his expertise in business niche.

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Designing Secure Commercial Spaces Without Compromising Aesthetics

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In the realm of commercial design, security and aesthetics often seem like opposing forces. Business owners and designers alike grapple with the challenge of creating spaces that not only captivate and inspire but also ensure the safety and security of assets and occupants. The good news is that integrating security features into commercial spaces without sacrificing visual appeal is entirely achievable. This blog post will delve into innovative design strategies that harmonise security with aesthetics, including a look at the best deadlocks for front doors in Australia, ensuring your commercial space is both beautiful and fortified.

Embracing Technology for Seamless Security

Modern technology offers a plethora of options for discreet yet effective security measures. For instance, advanced surveillance systems can be integrated into the architectural design in a way that they blend seamlessly with the environment. Smart locks and biometric access controls offer robust security without the clunky hardware, maintaining a sleek and modern aesthetic. Implementing these technologies not only elevates the security level of your commercial space but does so without disrupting its design flow.

Strategic Use of Materials and Design Elements

The choice of materials and design elements plays a crucial role in balancing security and aesthetics. High-strength materials such as tempered or laminated glass, for example, offer excellent security without compromising on the visual openness that glass provides. Similarly, incorporating natural barriers like decorative boulders or planters can serve as subtle physical deterrents while enhancing the space’s visual appeal.

Lighting: A Dual-Purpose Tool

Lighting is another powerful tool that serves both aesthetic and security purposes. Well-planned lighting can highlight architectural features and create a welcoming atmosphere while ensuring visibility and deterring unauthorised access after hours. Motion-sensor lighting, in particular, can be a discreet addition that enhances security without detracting from the design.

The Role of Deadlocks in Aesthetic Security

A critical aspect of securing any commercial space is the choice of locks, especially for front doors which are the primary entry and exit points. Deadlocks offer a high level of security, making them an essential feature for commercial spaces. However, selecting the right deadlock doesn’t mean you have to settle for a utilitarian look. Today, the market offers a variety of deadlock designs that complement any aesthetic, from modern minimalist to classic elegance. For those in Australia, choosing the best deadlocks for front doors involves considering both the security features and how the lock’s design integrates with your commercial space’s overall look.

Collaboration Between Security Experts and Designers

Achieving a balance between security and aesthetics often requires a collaborative approach. Security experts and interior designers need to work hand in hand from the early stages of the design process. This collaboration ensures that security measures are not afterthoughts but are integrated into the design in a way that complements the space’s aesthetic appeal.

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Designing secure commercial spaces without compromising aesthetics is not only possible but essential in today’s world. Remember, the goal is to integrate security seamlessly into the design, enhancing the user experience and ensuring peace of mind for both business owners and visitors. With thoughtful planning and collaboration, your commercial space can be a testament to the harmony that can exist between security and aesthetics.

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