Mezzanine Finance
Mezzanine finance gets its name because it sits in the middle between debt and equity finance. It’s a complex form of business funding, but can be useful in a few different situations, representing a third option to be used alongside a standard loan, equity fundraising, or both.
Mezzanine finance is often used as a kind of ‘top up’ in addition to the amount provided by the main lender. For example, if the main lender provides 65% of the amount you need for a project, mezzanine finance might provide a further 20% — leaving just 15% for the business to put in.
Or, mezzanine finance is a method of raising more capital with the same amount to put in yourself — it’s often the facilitator for bigger projects that the business couldn’t otherwise afford