Senior Loans

Senior loan financing packages are a type of short-term lending. Senior debt is very versatile as a product – a business can use it in many different ways. How your company uses this type of capital will need to be pre-agreed with your lender. Lenders are open to financing various projects, but you will need to have a defined plan of how you will use debt, for example, acquisitions, investment in assets, debt consolidation, etc. You will need to show evidence of supporting documentation, including your business's cash flow, revenue, assets, credit score, additional debt, and so on. 

Lenders will offer senior debt for various reasons, and we can help you broker these regardless of your requirements. The most important thing is to show a solid use case for senior loans that lenders can see will support the future success of your business. Because senior debt is repaid first if your company faces bankruptcy, you will also need to give lenders details about other debt you have or will take on to complete projects, if applicable. 

You can use senior finance to:

• Consolidate or restructure existing debt that exists within a business
• Acquire or buy out a large business or make an investment in a business
• Create capital for day-to-day operations or generate working capital (this is usually only an option to facilitate growth for a successful business, rather than to cover capital gaps)
• Generate finance to restructure a company and/or its ownership completely – this can be anything from buying out shareholders or repurchasing to taking a business private

Senior loan financing tends to be complex, and more players will be involved in the deal than just you and your lender. 

More lenders will be involved in the transaction when senior debt is used alongside subordinated debt. Usually, subordinated finance lenders must be more adaptive to any restrictions senior debt lenders place on loans than vice versa, but we advise 'big picture' thinking. When you use different types of debt in any single deal, you need to make sure they complement each other and are structured so that other lenders will be happy to come on board. You'll usually secure senior debt financing first, and we can help advise you on what you need to make part of the deal to make any subordinated debt as easy to source as possible. You want to ensure that your senior loan financing facility doesn't restrict you from getting the additional financing you need – we can advise you on this, as well as subordinated debt providers.

In very large senior loan financing deals, you may have a complex project that the loan will fund. This can be anything from an international acquisition or merger to restructuring. Here, you will have a team of experts advising on the deal and who will counsel you on how to structure the transaction. We can work alongside these advisers and your internal team to broker the financing package that meets your business requirements and to ensure you can use the loan in the way you envisage. This often needs to be carefully detailed with the senior debt financing lender, as they will want to know how funds are allocated. 

Senior secured loans are essential financing tools for property developers. Senior debt will form the majority of the development finance. You will usually 'top up' a senior loan with mezzanine financing to reduce what you need to put forward as a deposit. This type of finance will cover most of the finance you need to buy land and/or fund the main development project. Using mezzanine finance alongside senior loans will also reduce what you need to put forward as a deposit and maximise your return on investment. 

You will need a senior loan financing package structured for your individual development and how you need to use funds. We broker loans individually to ensure that they suit your development stages and planning. We will also consider how a senior secured loan will fit with any additional financing you need as part of the project.  

You can use senior loan financing to improve cash flow and maximise your return on investment. Usually, you will draw down the funds as and when you need them at different stages of the build. These will be agreed upon between you and your lender and will usually be when the main stages of your build are completed. Drawing down funds in stages will reduce your interest, as you typically pay interest on the amount you have drawn down rather than the total amount you borrowed.

Senior loan financing for property development is usually secured against the property you are developing. This type of finance is generally reserved for professional developers undertaking large-scale developments. Significant finance is available, amounting to millions of pounds. Lenders offer in the range of 60% GDV. However, how much you can borrow will depend on the scale of your project, the available capital you have to finance the development, your track record, the profitability of the development and so on. Some lenders can offer a little more than 60% GDV, and others will offer less. If you have capital available to you but are using senior loan financing to facilitate cash flow, maximise return on investment or carry out multiple development projects simultaneously, it will be easier to maximise what you can borrow. 

• Lenders will want to look carefully at your company's accounts, and capital flows in any senior loan financing deal. Your company's credit rating will also be critical. The larger the loan, the more carefully lenders will look at your company's financials and your plans. You must be able to give in-depth and sophisticated explanations of your accounts, projections, plans and how you will realise the project. We can help you present these plans to lenders and, at the same time, help you prepare the supporting documentation and application to show lenders the quality of the deal and your reason for seeking senior debt. 
• Consider all your debt at the same time as searching for financing. A senior loan lender that can complement the other types of debt you want is also essential. We can help you understand how this type of financing will form part of the wider finance you need to raise. We will help you secure the most competitive rates and terms and negotiate a package from a lender that will fit alongside the other types of finance you will seek.
• Senior debt is complex to arrange if you work alone, mainly if you are against the clock to raise finance. Your in-house team will be experts in their area of expertise but negotiating high-value finance is a specialism in its own right: you will get better offers from more lenders if you work with a broker that can handle this for you. Approaching banks and large lenders as a business is time-consuming, and lenders usually don't offer as much flexibility or negotiating room to companies as they do to brokers. We have long-standing relationships with senior loan financing lenders. These parties trust us to bring them quality deals and borrowers, and as a result, we can negotiate finance on the basis of explaining more about the deal and the tangible outcome this loan will have for your business. This is the key to getting a tailored finance package that meets your business needs.
• There are plenty of options for senior debt financing – probably more than you and your business associates are aware of. Lenders offer different debt for different types of projects and different loan sizes – high street banks are not the only lenders here. Most importantly, there are a variety of ways that we can structure this finance to make it more efficient for you. This can range from the security you'll put forward for the loan to how the deal is executed and arranged. As expert senior loan financing brokers, we are here to help and simplify the process of raising debt for you. We can explain your options, how to set up the deal, which lenders will be best for you and give more detail about costs, interest rates, how much you can borrow, subordinated finance and so on. This also means you can assure stakeholders that you have sourced the best deal available.