Mezzanine definition

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investment is a hybrid capital (either subordinated loan or preferred equity)
that lies between equity and loans.

It has still
lower risk than equity – mezzanine financing is repaid before equity, but after
all more senior obligations have been fulfilled.

Additionally to
the usual interest, bonuses that depend on the profitability of the project may
be added to the mezzanine capital.

Here is a
mezzanine loan example:

Read more about
other capital types:

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