Sub Debt Financing: Flexible Capital Without Collateral or Equity
Subordinate Debt (Sub Debt) Financing is a specialized funding solution designed for businesses looking to access capital without giving up equity or collateral. Ideal for industries such as food & beverage, eCommerce, wholesale/distribution, manufacturing, and transportation, this financing option allows businesses to secure a second-lien loan behind a senior lender, providing liquidity to support growth, manage cash flow, or finance major projects.
Sub Debt Financing offers flexible terms and fast access to capital, making it a valuable solution for businesses that need additional funding but want to avoid the complexities of collateral-backed loans or equity dilution.
How Does Sub Debt Financing Work?
Sub Debt Financing is a type of loan that sits behind your senior lender (first lien) in the event of liquidation or bankruptcy. This means the senior lender is paid back first, while the subordinate debt lender is paid second. The process is straightforward:
- Qualify for a second-lien loan behind your senior lender, based on your business’s cash flow and overall financial health.
- Receive up to $10 million in flexible funding with no collateral required.
- Repay the loan over 1 to 2 years with competitive interest rates ranging from 15% to 24%, depending on your business’s risk profile.
Because sub debt is not tied to collateral or equity, it’s a flexible solution for businesses that need access to capital but don’t want to take on more secured debt or give up ownership.
Unique Benefits of Sub Debt Financing:
- Large Funding Amounts: Secure up to $10 million to finance growth, acquisitions, or other significant business needs.
- Flexible Terms: Repayment terms are available from 1 to 2 years, allowing you to tailor the loan to your cash flow needs.
- Cash Flow-Based Approval: Approval is based on your business’s cash flow, not just your credit score or collateral.
- Competitive Rates: Rates range from 15% to 24%, providing a cost-effective alternative to equity financing.
- No Collateral or Equity Required: Unlike traditional loans, Sub Debt Financing does not require collateral, equity, warrants, or covenants, giving you flexibility in how you manage your business.
Qualifications for Sub Debt Financing:
- 1 year in business: Your business must have been operational for at least 12 months.
- 600+ FICO: A fair credit score helps you qualify for better terms and rates.
- $1 million in annual sales: Your business should generate at least $1 million in revenue to qualify.
Advantages for Your Business
- Access to Significant Capital: With up to $10 million in funding available, you can secure the capital you need to fuel large-scale growth projects, acquisitions, or capital investments.
- No Collateral Required: Sub Debt Financing is an unsecured solution, meaning you don’t have to put up property or assets as collateral, protecting your business’s assets.
- Maintain Ownership: Since Sub Debt Financing doesn’t require giving up equity, you can secure funding without sacrificing ownership or control of your business.
- Second-Lien Flexibility: Sub Debt allows you to access additional funding behind your senior lender without complicating your primary lending agreements.
With Sub Debt Financing, you can access the capital your business needs for growth, expansion, or major investments without collateral or equity requirements. This flexible funding solution provides the liquidity you need to succeed while preserving your business’s assets and ownership. Apply today to unlock flexible, second-lien financing for your business. Apply Now