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 Mezzanine financing, which combines debt and equity elements, is the layer of finance between senior debt and equity. Mezzanine loans are a  way to fund long term growth. They involve an equity kicker and a higher interest rate than a bank loan in exchange for:

•Receiving money (when a bank will not provide it)  at a higher leverage ratio  

 •Having a longer repayment  and duration term 

 What is a Plenus Mezzanine Loan? 
 Plenus Mezzanine loans are complementary and or a substitute  to senior debt. Depending on the company and deal, the Mezzanine debt can be subordinated and Plenus can act as a co-lender or singular lender, offering maximum flexibility. In consideration for the loan, Plenus Mezzanine receives interest and an additional return in the form of an equity kicker.

 When should Mezzanine be considered?
This structure is typically used to finance growth and expansion phases, mergers & acquisitions or leveraged buyouts of relatively mature, revenue-generating, profitable companies with positive cash flow. Mezzanine loans can strengthen debt capacity by providing additional capital beyond what a senior secured lender, or an equity investor, are willing to provide -- with less dilution to shareholders, entrepreneurs, and management.

Benefits of a Mezzanine loan

Mezzanine loans offer several advantages to the company and its owners:

• Minimizes the need to bring in additional investors at an early point in time or under a relatively low valuation
• Ability to execute growth strategy while using a low level of shareholders’ equity
  
• Alignment of  incentives: lender’s return is partially provided by an equity kicker, ensuring lender's participation in the success of the business
• Lower costs than an equity investment