Development · Stretched senior

Stretched senior development finance

Higher leverage from a single lender — combining senior and mezzanine-level funding in one facility, with one set of documents and one point of contact.

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How stretched senior works

A stretched senior facility lends more than conventional senior debt — typically by increasing the loan-to-cost and loan-to-GDV limits — while keeping a single lender and a single first charge. The blended rate is higher than standard senior debt but usually lower and simpler than layering separate senior and mezzanine loans.

The trade-off is fewer lenders and more scrutiny on the appraisal, the build programme and your experience. Lenders want confidence that there is still a meaningful equity cushion below them.

When stretched senior is the right fit

Reducing your equity contribution without bringing in a second lender
Keeping control of the scheme rather than sharing profit with a JV partner
Schemes with strong margins that can absorb a higher cost of debt

Questions

Frequently asked questions

Is stretched senior the same as senior plus mezzanine?

It achieves a similar level of leverage, but through one lender and one facility. That usually means simpler documentation, no intercreditor agreement and a single monitoring process.

What profit margin do lenders expect for stretched senior?

Lenders typically want to see a healthy profit on cost so the scheme can absorb cost overruns or price softening. The exact threshold varies by lender and scheme type; we test your appraisal against current lender appetite before approaching them.

Working up a scheme?

Share the appraisal as it stands — even in draft. We will look at the capital stack with you before anything goes to a lender.

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