What is Mezzanine finance?

Mezzanine finance is a type of financing that sits between debt and equity. It is often used to fund growth or expansion projects. Unlike traditional debt, mezzanine finance is typically unsecured and has a higher interest rate. It gives the lender the right to convert their debt into equity if certain conditions are met. This makes mezzanine finance a flexible option for companies that need capital but don't want to dilute their ownership. It is commonly used in real estate development, leveraged buyouts, and other high-risk ventures.