Mezzanine financing example uses and investment criteria

Mezzanine financing example uses and investment criteria are the key to understand how this form of capital worksOnce you review the definition of mezzanine financing, it is best to get familiar with at least one mezzanine financing example to better understand the concept in practice. Even more so, if you can see a full range of situations in which mezzanine capital is used and the investment criteria typically applied by the investors.

Below, we have collected an extensive list of example situations in which mezzanine financing is used. Furthermore, to make it even more relevant, we put it in the context of the investment criteria typically employed by the mezzanine financing companies. After reading through this article, you should have a good idea in which situations mezzanine financing can be used in the corporate finance setting.

The sections below follow the content of a conversation that a company looking for mezzanine financing might have with a mezzanine fund when approaching them for the first time. Mezzanine firms will first want to establish if the company in question is suitable as a potential investment target for them. Therefore, they will ask questions directly linked to their investment criteria.

Mezzanine financing example step-by-step with the investment criteria – one at a time

Each question below has a number of potential answers – feel free to explore different options as they give good insights and more practical mezzanine financing examples. There is no right or wrong answer. Read through the comments for each answer to understand how mezzanine lenders might think about such response.

Strategic/transition situation
Financial position of the company
Funding need
Management profile
Industry
Fixed assets and collateral
Financial controls and information systems
Mezzanine financing firm level of involvement into your business