Mezzanine Financing When a term loan is not an alternative for the debt financing of a small business acquisition, the borrower with little net worth can structure a creatively financed deal that transfers some potential equity ownership in return for less stringent personal commitments to the bank. This financing is termed "mezzanine financing." Mezzanine financing typically allows the bank to provide a term loan over some intermediate time period (e.g. usually 7 to 10 years) with an option to convert a balloon payment at the end into some equity ownership.
