Mezzanine Financing is a hybrid form of business funding that combines debt and equity. It typically involves subordinated debt with equity options, providing companies with flexible capital for expansion or acquisitions. In case of default, mezzanine lenders have a claim after senior debt but before equity holders, reflecting the intermediate nature of this financing.
Mezzanine financing is suitable for businesses needing additional capital beyond traditional loans but without diluting immediate equity. It's often utilized for expansion, acquisitions, or buyouts where the existing capital falls short. This form of financing allows companies to leverage their assets and future cash flow, making it an option when seeking flexible funding for strategic growth initiatives.
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