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Mezzanine Loans in Washington

Browse 8 lenders offering mezzanine loans in Washington. Compare rates, requirements, and loan programs — then connect directly.

WA Lenders
8
Typical Rate
10% - 18%
Down Payment
Reduces equity to 5-15% total
Term
1-7 years
Closing Time
30-60 days

About Mezzanine Loans in Washington

Mezzanine financing sits between senior debt and equity in the capital stack. It allows borrowers to increase leverage beyond what a first mortgage provides, reducing the equity needed for a deal. Secured by a pledge of the borrower's ownership interest rather than a lien on the property. In Washington, 8 lenders currently offer Mezzanine financing with loan amounts from $1M to $100M and rates typically ranging from 10% - 18%.

Washington Market Overview

Washington state's economy is powered by technology giants Amazon and Microsoft, along with Boeing's aerospace operations and the Port of Seattle's international trade. The Seattle metro has experienced transformative commercial growth driven by tech sector expansion.

Washington has no state income tax, but commercial property tax rates and the state's Business and Occupation (B&O) gross receipts tax on commercial rent income must be factored into CRE investment underwriting. Seattle's mandatory affordable housing linkage fees and the city's MHA (Mandatory Housing Affordability) requirements add costs to commercial development but also unlock additional development capacity through upzones. The state's GMA (Growth Management Act) concentrates commercial development within urban growth areas, creating supply constraints that support property values in designated centers while limiting suburban sprawl.

Who Should Consider Mezzanine Loans?

  • Reducing equity requirement
  • Large acquisitions
  • Development projects
  • Recapitalizations

Key Requirements

  • Strong sponsor track record
  • Viable business plan
  • Senior lender approval for subordinate debt
  • Adequate debt service coverage for total debt

Pros and Cons

Advantages

  • Reduce equity needed
  • No lien on property (pledge of ownership)
  • Flexible structures
  • Can be interest-only

Considerations

  • High interest rates
  • Subordinate position = higher risk
  • Requires senior lender approval
  • Complex documentation

Mezzanine Loans FAQ

How does mezzanine differ from a second mortgage?
A second mortgage is secured by a lien on the property. Mezzanine debt is secured by a pledge of the borrower's ownership interest in the entity that owns the property. This distinction matters for foreclosure — mezzanine lenders can take over the entity via UCC foreclosure, which is faster than mortgage foreclosure.

Mezzanine Loans by City in Washington

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