Mezzanine Debt Financing is a form of Debt that fills the gap between Senior Debt and Equity financing in a real estate project. When Mezzanine Debt is used in conjunction with Senior Debt, it reduces the amount of equity required in the business. The advantage in using mezzanine debt is that sometimes it is difficult to obtain the entire balance of capital needed for a project from equity. Mezzanine debt is not collateralized by assets, but made against project investments cash flow, not the assets of the real estate business.