What is Mezzanine Loans?
A mezzanine loan is a subordinate, non-traditional loan that blends equity and debt. It has its advantages and disadvantages, one of the latter being that a business might have to sacrifice equity. The interest is high, but it is tax-deductible. Typically, mezzanine loans are granted to companies that have a track record of success and are rapidly expanding.
- Tax-deductible Interest Payment
- Blend of Equity and Debt
- Increase in Capital