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Mezzanine financing refers to a type of debt or equity financing that sits between senior debt and equity in the capital structure of a company. It typically involves a higher level of risk for the lender, as it is often unsecured and subordinated to senior debt. Mezzanine financing is commonly used by companies looking to fund growth, acquisitions, or buyouts, and often includes features such as warrants or convertible securities. This form of financing is characterized by higher interest rates and fees compared to traditional bank loans, but offers greater flexibility and potential for higher returns for investors.