MEZZANINE

Diagram of private equity fund structure for P...

Although Equity financing is an option, Mezzanine financing is often the solution. It is a cost effective alternative to higher priced equity. Mezzanine lenders are very liberal in tailoring their investment to meet the financial, operating, and long-term cash flow needs of the borrower.

As long as the subordinated lender’s anticipated yield is satisfied, they can be flexible as to the amortization of the loan and the interest rate. Major sources of mezzanine financing include private investors, insurance companies, mutual funds, pension funds, and banks.