A source of expansion capital for companies that have loans and are unable to obtain another loan but need additional capital. Mezzanine funding is a hybrid of a loan and an equity capital investment. It is typically set up as loan to a mature and growing business, where the company pays interest but collateral is provided by ownership in the company. It is appropriate for businesses in service industries that find it hard to get loans because people, rather than typical collateral such as equipment, are their primary assets.