Mezzanine Finance

A hybrid of debt and equity financing often used to finance expansions.  A lender gives a loan to a company, with the ability to covert the debt into equity.  The debt can be converted by the lender into equity of the borrowing company if the loan is not paid back in time.  Advantages of mezzanine financing include less collateral for the loan for the borrower and large returns on investment for the lender.