A Mini-Perm Loan is a short- to medium-term senior debt facility commonly used in UK property development finance to bridge the gap between construction completion and a longer-term exit such as refinancing or sale. Typically structured with terms of three to five years, mini-perm loans offer developers time to stabilise the asset or meet covenants before securing permanent finance. These loans often include features that encourage early refinancing, such as margin step-ups or bullet repayments. They are particularly suited to projects where the long-term lender is not yet in place during the early development phase.
Within the capital structure, a Mini-Perm Loan typically sits firmly within Senior Debt 1st Charge, maintaining priority over subordinate funding while allowing time for income stabilisation or leasing to mature. It is frequently aligned with an anticipated transition into a Refinance Loan, particularly where exit depends on achieving investment-grade cash flow. In scenarios where performance lags or refinancing is delayed, lender flexibility may be governed through mechanisms such as a Forbearance Agreement. Throughout the term, viability and refinancing readiness are closely monitored using Financial Resilience & Liquidity Indicators, ensuring the asset can support longer-term debt placement.
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