CMBS Supplemental Financing

Mezzanine Financing in Relation to CMBS Loans

Mezzanine Financing in Relation to CMBS Loans

Since CMBS loans typically prohibit second mortgages, many borrowers have turned to mezzanine financing to fill in the gap. Mezzanine financing, unlike a traditional second mortgage, is a hybrid of debt and equity that permits the lender to convert their debt into shares in the borrower’s company in the case of a loan default.