Top 5 Things Developers Should Prepare Before Seeking Mezzanine Capital

[Paul G. Ward III]

🏗️ Top 5 Things Developers Should Prepare Before Seeking Mezzanine Capital

Ever had your senior lender stop short of your target leverage?
That’s where mezzanine capital steps in — bridging the gap without giving up equity.

But before you approach a mezz lender, preparation is key. Here’s what to have ready:

1️⃣ Current Pro Forma – Updated with realistic DSCR and stabilized income assumptions.
2️⃣ Clear Cap Table – A simple ownership summary that shows transparency and alignment.
3️⃣ Defined Exit or Refinance Plan – Lenders want to see how they’ll be repaid.
4️⃣ Updated Appraisal & Project Budget – Accurate, current numbers make underwriting smoother.
5️⃣ Strong Sponsor Story – Your track record and narrative still matter more than any spreadsheet.

💡 Pro Tip: Preparation speeds up funding, builds lender confidence, and often improves your terms.

⚖️ FAQ: “Is Mezzanine Debt Just Expensive Equity?”

Not exactly. Mezzanine is debt, but subordinated.
You pay interest like a loan — without giving up ownership like equity.

Curious:
If you’ve raised mezzanine or preferred equity before — what was the hardest part of getting lenders comfortable with your deal?

👇 Let’s share some insights — it helps everyone in the community.