If we apply some of these financing products to a capital structure, we would see something like this where the net operating assets or enterprise value is on the left and the funding sources are on the right. The capital stack, like many balance sheets, would generally have the shorter term products on top and the longer term products on the bottom with equity being last. The stack also reflects the seniority of the debt, meaning which debts would be paid off first.

RCFs and term loans are almost always senior bonds can be senior or junior, but are often senior. Mezzanine is almost always junior. In addition to seniority, we also notice the top of the capital stack is secured by assets. The company has pledged collateral for these loans. The bonds in mezzanine are typically unsecured. If we combine the elements of payment, seniority with collateral or security, we understand that the risk always builds as we move toward the bottom of the capital structure. The RCF and the term loans are the least risky, and the mezzanine is the riskiest of the debt. Equity is overall the riskiest financing due to its residual or last claim on the assets.