Glossary · Real estate finance
Senior Loans: First-Ranking Property Finance Explained
The Senior Loan is the foundation of every capital structure: first-rank secured, cheapest priced – and the yardstick by which all other tranches align.
Last updated: 18 July 2026 · Reviewed by Jürgen Kronawitter
Features of a Senior Loan
- First step collateralisation: Land charge in the first Ranking in German: First-ranking loans.
- Conservative: Mostly 60–80 % LTV, controlled by: Mortgage lending value and DSCR.
- Structure: for herds: annuity loan with ongoing repayment; for projects final with payment after construction progress.
- Documentation: Covenants, reporting obligations and payment requirements in the credit agreement.
Anyone who awards senior loans – and what do lenders pay attention to?
Commercial banks, savings banks and Pfandbrief banks dominate senior lending, with insurers, pension funds and senior debt funds also active. Each has its own lending criteria by asset class, amount and region. They assess the property’s location, condition and occupancy, cash flow, Credit quality and track record of the sponsor. The competition of multiple addresses is the most effective lever on margin and secondary conditions.
Senior Loan in Capital Structure
Because the Senior Loan does not cover the entire cost, it is supplemented in professional structures: by Mezzanine capital or Subordinated loans above the first rank – or equal to Whole loans with a single lender covering the full debt requirement. The combination that best balances cost, flexibility and speed depends on the project. We structure and arrange senior loans from €750,000 to €180 million. Details are available on the service page Senior loans.
Frequently asked questions
Senior loans: quick answers
What makes the Senior Loan different from the Whole Loan?
The Senior Loan covers only the first tier tranche (approximately 60–80 % LTV); the Whole Loan combines senior and subordinated share to a total financing from a single source with a higher leverage and mixed margin.
What are the terms of a Senior Loan?
Typically the lowest-cost component of the capital structure. Actual terms depend on capital market rates, LTV, property quality, cash flow and creditworthiness. Reliable terms require a review of the documents and discussions with lenders.
Do I also get a Senior Loan for project development?
Yes – as first-ranking project financing with disbursements after construction progress, supplemented by pre-sale or pre-letting requirements. The gap above the senior closes equity and mezzanine.
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About the author
Jürgen Kronawitter
Jürgen Kronawitter specialises in structured real estate finance. He helps property investors, developers and portfolio owners implement complex financing solutions. His work focuses on structuring and arranging senior loans, whole loans, mezzanine capital and bridge loans, as well as tailored financing for acquisitions, investment properties, developments and refinancing.