Mezzanine Financing

A hybrid of debt and equity financing naturally used to funding the growth of existing corporations. Mezzanine financing is debt capital that gives the moneylender the privileges to adapt to an ownership or justness interest in the company if the loan isn’t paid back in time and in full. It’s usually subordinated to debt provided by older lenders such as banks and course capital corporations. Because mezzanine financing typically is provided to the debtor rapidly with little due business on the part of the lender and little or no warranty on the part of the borrower, this type of financing is violently valued with the moneylender looking for a return in the 20- to 30-% range. Mezzanine financing is helpful because it’s treated like equity on a company’s balance sheet and may make it easier to find standard bank financing. To attract mezzanine financing, a corporation usually must prove a track record in the business with a recognized name and product, a history of profitability and a feasible growth plan for the business.