What is mezzanine financing?
What is mezzanine financing? Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert to an equity interest in the company in case of default, generally, after venture capital companies and other senior lenders are paid. Who uses mezzanine financing? In relation to management buyouts, mezzanine financing is typically used by the current management team of a company to buy out the current owners, such as private equity or other investors, and gain control of the business. Is mezzanine financing a second mortgage? A mezzanine loan is a type of financing used...