Mezzanine Debt
Mezzanine Debt is a type of business funding that sits between regular bank loans and company ownership (equity). Think of it like a hybrid financing option that combines features of both debt and equity. Companies use it when they need extra money for growth, buying other businesses, or other big projects. It's called 'mezzanine' because, like a mezzanine floor in a building that's between two main floors, this type of funding sits between traditional loans and equity investment. It's more expensive than regular bank loans but gives companies more flexibility, and investors get higher returns for taking on more risk.
Examples in Resumes
Structured and executed Mezzanine Debt deals worth $500M across healthcare and technology sectors
Led due diligence process for Mezzanine Financing investments in middle-market companies
Managed portfolio of Mezzanine Debt and Subordinated Debt investments totaling $750M
Typical job title: "Mezzanine Debt Professionals"
Also try searching for:
Where to Find Mezzanine Debt Professionals
Professional Networks
Industry Organizations
Job Boards
Example Interview Questions
Senior Level Questions
Q: How do you structure a mezzanine deal to balance risk and return?
Expected Answer: A senior professional should discuss evaluating company financials, determining appropriate interest rates, equity kickers (like warrants), and negotiating protective covenants while considering both lender security and borrower flexibility.
Q: What are the key factors you consider when evaluating a mezzanine investment opportunity?
Expected Answer: Should explain analyzing company cash flows, management team quality, industry position, exit opportunities, and how mezzanine fits into the company's overall capital structure.
Mid Level Questions
Q: What are the typical terms found in mezzanine debt agreements?
Expected Answer: Should be able to explain common features like interest rates, payment-in-kind (PIK) interest, warrants, covenants, and prepayment terms in simple language.
Q: How does mezzanine debt differ from senior debt and equity?
Expected Answer: Should explain the risk-return profile, security position, control rights, and typical uses of each type of funding in straightforward terms.
Junior Level Questions
Q: What basic financial metrics do you look at when analyzing a potential mezzanine investment?
Expected Answer: Should mention key metrics like EBITDA, leverage ratios, interest coverage, and cash flow analysis, showing understanding of basic financial analysis.
Q: Explain the basic structure of a mezzanine deal.
Expected Answer: Should describe the typical components including interest payments, PIK interest, potential equity participation, and basic security position in simple terms.
Experience Level Indicators
Junior (0-2 years)
- Basic financial modeling and analysis
- Understanding of capital structures
- Deal documentation review
- Financial statement analysis
Mid (2-5 years)
- Deal structuring and execution
- Due diligence management
- Portfolio monitoring
- Investment committee memo preparation
Senior (5+ years)
- Deal sourcing and relationship management
- Investment strategy development
- Team leadership and mentoring
- Portfolio company board representation
Red Flags to Watch For
- Lack of understanding of basic capital structure concepts
- No experience with financial modeling or analysis
- Poor grasp of risk assessment in lending
- Limited knowledge of industry standards and terms
Need more hiring wisdom? Check these out...
How Internal Gig Marketplaces Revolutionize Employee Development
Lost in Translation? How a Hybrid Mentorship Database Bridges Cross-Regional Talent
The $100M Mistake: Hidden Costs of Rushed Leadership Hires (Data Study)
