In the competitive world of UK property development, bridging the gap between equity and traditional lending can be the key to delivering profitable projects. Stretch senior finance is an increasingly popular solution for developers looking to secure higher leverage without turning to expensive mezzanine finance.
At Fraser Bond, we provide developers with access to flexible stretch senior lending solutions tailored to complex development scenarios across London and the wider UK market.
Stretch senior finance is a hybrid lending structure that provides a higher loan-to-cost (LTC) or loan-to-value (LTV) than conventional senior debt—typically up to 75%–85% LTC—while maintaining first-charge security over the development asset.
It combines the lower cost of senior debt with the flexibility of subordinated capital, allowing developers to reduce their equity contribution and accelerate project delivery.
Stretch senior loans reduce or eliminate the need for a separate mezzanine facility. This simplifies the capital stack and ensures faster approvals and drawdowns.
Interest rates for stretch senior finance typically sit between standard senior debt and mezzanine loans—often 7–12% p.a.—making them significantly more affordable than equity dilution or multiple funding layers.
In high-value areas like Zones 1–3, where land prices and build costs are high, stretch senior loans help maintain development viability and investor returns.
Fraser Bond offers bespoke advisory support to help developers secure the most efficient capital structure for their projects—whether residential, commercial, or mixed-use.
Our services include:
Sourcing stretch senior debt from UK specialist lenders
Structuring facilities for acquisition, construction, and sales phase
Coordinating professional valuations, monitoring surveyors, and legal counsel
Blending stretch senior with developer equity or forward funding
Providing full-cycle development advisory in prime and emerging London locations
Fraser Bond's strategic lender relationships allow us to negotiate favourable terms and fast-track approvals, even for complex or time-sensitive deals.
Project: 20-unit residential development in Vauxhall, South London
GDV: £12 million
Land & Build Cost: £8.5 million
Developer Equity: £1.3 million
Stretch Senior Facility: £7.2 million (85% LTC)
Rate: 9% p.a. interest rolled-up
Outcome: Equity preserved across pipeline, 32% IRR projected
| Development Scenario | Reason to Use Stretch Senior |
|---|---|
| Limited equity availability | Maximise leverage efficiently |
| Delays in forward funding or sales proceeds | Bridge capital shortfall |
| High-margin urban infill project | Optimise return on equity |
| Avoiding complex mezzanine structures | Simplify capital stack |
Stretch senior is ideal for developers who need capital agility but still want to retain control and minimise cost of finance.
Stretch senior finance gives UK property developers a powerful funding tool to deliver projects faster and more profitably. It offers higher leverage, fewer administrative hurdles, and flexible structuring tailored to today’s dynamic London market.
At Fraser Bond, we help developers secure and structure stretch senior loans that support growth while preserving equity and managing risk.
Visit FraserBond.com to speak with a senior finance advisor or request a tailored stretch senior proposal for your next development.
