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What is a Senior Stretch Loan?

Updated: Mar 12

In effect, a senior stretch loan combines a senior loan and a mezzanine loan into the one loan. The senior loan is simply stretched to give the developer more financial muscle to do what they need to do.


A senior stretch loan is designed to give property developers higher levels of finance for their project from the one place. In effect a senior stretch loan combines a senior loan and a mezzanine loan into the one loan. The senior loan is simply stretched to give the developer more financial muscle to do what they need to do. The interest rate of these loans are generally attractive compared to the blended rate of an alternative senior and mezzanine loan finance package. There are additional costs advantages of not doubling up on legal, valuation and quantity surveyor fees. It also the trouble of having to deal with the complexity of an inter-creditor agreement and additional paperwork.


The typical terms of a senior stretch loan facility include:

  • Maximum Loan to Costs: Up to 90%

  • Maximum GDV: 75%

  • Minimum profit on cost: 20%

  • Loan duration: Generally up to 24 months

  • Maximum loan amount: £50m

  • Borrower equity: 10% of total costs


Please speak to us on 02071128123 or email hello@adelphacapital.com if you would like further information on development financing options or have a specific case to discuss.

Adelpha Capital Ltd trading as Adelpha Property Finance do not provide regulated bridge and development loans and are not regulated by the Financial Conduct Authority. Think carefully before securing debts against your property. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

 

Registered Address: Adelpha Capital Ltd, 27 Old Gloucester Street, London, WC1N 3AX, UK

Company Number: 10409699

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