Mezzanine

second-in-line debt: expensive, unsecured, paid after the bank

In more detail

Expensive second-in-line debt: it is provided when the bank has already given everything it is prepared to give and the project still lacks money. Such a lender has no collateral and stands after the bank in the queue for payment.

It was invented to close the gap between what the bank is prepared to finance and the full cost of the project, without diluting the owner's stake.

Covered in the primer of chapter 3.

Where it appears in the course

In the academy “Mezzanine” is not a definition but an operation: you post it yourself and watch what it does to the balance sheet.

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