Mezzanine financing is an unsecured long-term debt, accompanied by investors' right to subscribe for the rights and interests of financiers. Mezzanine financing is only a kind of subordinated debt, but it is often used as a synonym for subordinated debt. The interest rate of mezzanine financing is generally between 10%- 15%, and the target rate of return of investors is 20% ~ 30%. Generally speaking, the lower the mezzanine interest rate, the more rights to subscribe.

Generally speaking, it is to provide financing parties with funds between equity and bonds, usually to fill some capital gaps that are still insufficient after considering equity funds and ordinary debt funds. Therefore, mezzanine funds are essentially a kind of loan funds, ranking behind loans in the repayment order of enterprises.

Mezzanine financing is a technical means of financing, which plays the role of "bridge financing" in many cases, with a general term of one to two years. For example, in mezzanine financing of real estate, the capital demand from enterprises to development loans is met through mezzanine financing.

Mezzanine investment is also a form of investment in private equity market, and it is the evolution and expansion of traditional venture capital. In Europe and America, there are special mezzanine funds. If we use the same amount of equity and senior debt to finance, but there is still a big funding gap, mezzanine financing will provide debt funds with higher interest rate than senior debt, but at the same time bear higher risks. Because mezzanine financing is mostly used to help enterprises improve their asset structure and rapidly increase their turnover, it often provides the right to subscribe for shares when enterprises are listed or acquired while issuing this form of subordinated creditor's rights.