Mezzanine loans are debts that represent a claim on a company’s properties and can be structured either as debt or preferred stock. Higher cost of capital involved with mezzanine loans makes it an expensive option. Mezzanine financing is less likely to be paid back completely in the event of default; after all important obligations have been satisfied. These are private placements and are generally used by smaller companies.
Mezzanine loans are becoming a common alternative to conventional financing. It is so because a mezzanine loan is not secured
