BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Detailed explanation-1: -Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert the debt to an equity interest in the company in case of default, generally, after venture capital companies and other senior lenders are paid. In terms of risk, it exists between senior debt and equity.
Detailed explanation-2: -Venture debt is a type of debt financing obtained by early stage companies and startups. This type of debt financing is typically used as a complementary method to equity financing. Venture debt can be provided by both banks specializing in venture lending and non-bank lenders.
Detailed explanation-3: -Debt financing is any type of loan that a company uses to fund its business as part of the capital raising process. Essentially, when a business chooses to fund their working capital with a loan, it means they get their money from an outside source. This incurs a debt to the lender of those funds.
Detailed explanation-4: -The loans are usually available only to strong, mature companies. The loan must be repaid or reduced to a certain agreed-upon level on a periodic basis.