Since mezzanine financing is subordinate to senior debt, in the event of default or liquidation, lenders may not be repaid if the company is unable to meet its financial obligations. This makes mezzanine financing a riskier investment compared to senior debt.Since mezzanine financing is subordinate to senior debt, in the event of default or liquidation, lenders may not be repaid if the company is unable to meet its financial obligations. This makes mezzanine financing a riskier investment compared to senior debt.