Preliminary communication

FINANCING GAP FOR SMES AND THE MEZZANINE CAPITAL

Laura Giurca Vasilescu

Abstract

Mezzanine capital is a hybrid instrument which combines the benefits of debt and equity and
represents an alternative source in financing the start-up and expansion of SMEs.
The paper analyzes the mezzanine financing instruments that include private placement
instruments (private mezzanine) and capital market instruments (public mezzanine) and the level of
development in the market for mezzanine financing that varies across Europe: while SMEs in some
countries can choose from a wide range of different products, other countries still have ground to
make up in this area.
Taking into consideration the financing gap of the SMEs in EU, the mezzanine capital
represent an important option for covering this gap. This instrument should be considered in the
context of the international financial crisis which affects dramatically the possibilities of financing for
the SMEs. Thus, the paper presents the main features and advantages offered by this hybrid financing
instrument from the firms and investors’ perspective but also the main challenges

Keywords

financing; SMEs; mezzanine capital; gap; equity; debt; EU

Hrčak ID:

59418

URI

https://hrcak.srce.hr/59418

Publication date:

30.9.2010.

Article data in other languages: croatian

Visits: 6.850 *