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🏗️ Mezzanine Finance: The Hybrid Bridge
Mezzanine Finance is a sophisticated form of capital that is a hybrid of debt and equity. The term "mezzanine" (like the architectural term for an intermediate floor) refers to its position in a company's capital structure: it ranks behind Senior Debt (like bank loans) but ahead of Common Equity (shareholder funds) in priority of repayment.
It is typically used by established, profitable companies for large-scale growth initiatives, acquisitions, or leveraged buyouts (LBOs) where the full required capital cannot be secured through senior debt alone.
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