Mezzanine
Mezzanine is junior debt that sits between senior debt and equity in the capital structure. It provides flexible growth capital with limited structure, priced comparably with venture debt but cheaper than equity, and suits established companies with a stable trajectory and a defined exit in 2-4 years.
Because mezzanine ranks behind senior debt, it adds borrowing capacity on top of existing facilities without disturbing them. Repayments are largely back-ended or bullet at maturity, so cash stays in the business through the growth phase. It is particularly well suited to businesses nearing an IPO or M&A exit.
Indicative ticket
$10M-$100M
- Quantum
- Sized on enterprise value and exit visibility
- Term
- 2-5 years
- Repayment
- Typically drawn at close (may be tranched on milestones); principal largely back-ended or bullet at maturity
- Covenants
- None or covenant-lite
- Security
- Junior / second ranking
- Pricing
- Arrangement fee, interest, early repayment fee and warrants
Indicative only and subject to diligence. Actual terms depend on your business and the market.
Business profile
Who mezzanine is for
- $15M+ revenues with 30%+ YoY growth
- Stable trajectory and enterprise value
- Series C+ or growth-equity backed
- Breakeven within 24 months; exit in 2-4 years
Debt purpose
What the capital is for
- Growth capital
- Acquisitions
- Recapitalisation
- Increase balance sheet liquidity
Benefits
Why borrowers choose it
- Flexible growth capital with limited structure
- Adds capacity on top of senior debt
- Cost comparable with venture debt but cheaper than equity
- Bullet repayment keeps cash in the business
When not to use it
An honest word of caution
- !Earlier-stage businesses with product or business-model risk
- !Where enterprise value is unstable and the exit strategy is not defined
How it compares
Versus venture debt, mezzanine suits later-stage companies with stable enterprise value and a defined exit. Versus unitranche, it sits junior in the stack and layers on top of senior debt rather than replacing it.
Terms, criteria, and sizing shown are indicative, not exhaustive, and subject to further diligence on the company and its assets.
Mezzanine is junior debt that sits between senior debt and equity. It provides flexible growth capital with little structure, repaid largely at maturity, and is priced between senior debt and equity, often with warrants.
Related products
All guidesCashflow financing
Unitranche & Buyout Finance
A single blended facility for profitable companies, buyouts, and acquisitions.
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Growth Debt
Larger, cheaper debt for scale-ups with established revenues.
Learn moreCashflow financing
Venture Debt
Non-dilutive runway for VC-backed companies, alongside or after a round.
Learn moreCurious what mezzanine could look like for you?
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