Mezzanine Financing can be thought of as a hybrid of debt and equity financing, taking junior position behind the senior debt, but senior to the equity. Mezzanine loans are typically paid back on an amortizing schedule, with higher cost of capital than senior debt, but without taking any upside returns above their predetermined interest rate. Mezzanine loans take a leverage position than the senior lender, typically where equity would reside, but with a repayment structure similar to that of a senior debt loan and are guaranteed by the underlying real estate.