MFEG Preferred Equity Finance
Spread capital across projects, start earlier on a project and potentially increase your return on cost.
Preferred Equity Finance
Preferred equity is a form of financing that effectively takes a direct stake in a project and is paid back before common equity but behind any debt positions. Typically, a preferred equity facility will come with a coupon rate of annual return rather than a profit share arrangement.
Like mezzanine funding, taking a preferred equity facilitiy may enable a developer to spread capital across projects, start earlier on a project and potentially increase their return on cost. Preferred equity differs from mezzanine finance, however, as rather than take a 2nd mortgage position on the property with a defined interest rate, a provider will take an equity stake in the development entity, usually with a fixed coupon rate. The end result is very similar but this structuring can be more suitable than mezzanine finance in certain situations, such as where the senior debt provider does not allow a mezzanine finance facility to go in behind them.
As a business that is focused on solutions and with a flexible model of funding, MFEG has the ability to structure the most appropriate financing model for a particular project including the taking and arranging of preferred equity positions where it is appropriate and workable to do so.
Funded Transactions
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Remember at MFEG we tailor borrowing for each client. Be sure to review all six approaches below and contact us with a quick or detailed enquiry.
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