Mezzanine financing instruments, which represent a hybrid form of equity and debt, are considered an appropriate means to improve the financing situation of German medium-sized companies, which traditionally have a low equity ratio, in light of Basel II. Against this background, the concept of mezzanine financing instruments is first explained and delineated alongside other relevant terms. Subsequently, financing forms specifically suitable for medium-sized companies are selected and examined regarding their legal structuring options, accounting under HGB as well as IFRS, and their tax treatment. It becomes evident that in contractual design, the almost unlimited legal structuring options must always take into account the implications for financial reporting.