Mezzanine financing

Mezzanine financing is debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back. The strategy has an equitylike risk with an upside ceiling. It is often a hybrid of private debt and private equity financing. Mezzanine financing is listed on a company’s balance sheet as an asset; some companies use mezzanine financing because it makes it easier for them to obtain financing from other sources. See also private equity.