ESOP Mezzanine Financing:  For ESOP companies seeking to acquire higher levels of leverage than commercial banks can offer, Mezzanine Financing exists.  Mezzanine financing is a bridge between commercial banking and private equity.  This form of financing refers to subordinated debt or preferred equity as a claim on a company's assets which is senior only to that of the common shares. Mezzanine financings can be structured either as unsecured and subordinated debt or preferred stock Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} .  Mezzanine Financing is much more expensive in financing because of the risks Mezzanine Financiers take to loan money to companies.   While they may offer lower interest rates for the notes the company borrows, it also adds "kickers" or incentives such as warrants or preferred stock to reach their own goals of internal rates of return.  Usual companies for this kind of funding have high growth characteristics and strong cashflows.