what is a mezzanine type loan 
a mezzanine loan is a source of capital that is between less risky senior debt and higher risk equity with some of the features of both mezzanine loans are usually subordinated to senior debt or can be preferred equity with a fixed rate coupon or divided they may also have some form of participation rights such as warrants in the common equity of the business though in a manner that will be far less dilutive of ownership than the issuance of common equity mezzanine loans are generally quite expensive in the 12 to 30 range but are also patient debt in that no payments toward the principal are due prior to maturity this patient attitude of the debt allows the business to grow toward the ability to repay the loans and to increase its ability to carry more senior and therefore less expensive debt it is usually not just subordinated but also unsecured if the borrower faces liquidity problems it is possible to push a pause button on current interest payments for mezzanine debt thus making the senior lenders more secure in their protected senior status 