Subordinated Debt

Program Details

• Up to $15M max financed amount
• 1–2 year terms
• Rates starting at 15%
• Subordinate 2nd lien behind senior lender
• No collateral coverage, no equity, no warrants, no covenants

Understanding Subordinated Debt

Because it is structurally different from many working-capital products, subordinated debt is commonly evaluated as part of a broader transaction or strategic financing plan. Capital Access Pro can help a business begin the conversation and understand how this category may complement senior financing.

Common Uses

• Supporting an acquisition or ownership transition
• Helping fund a recapitalization or strategic expansion
• Complementing senior financing in a larger capital plan
• Addressing a transaction-related capital gap

How the Process Works

1. Define the transaction, growth plan, or strategic capital requirement.
2. Review the existing senior obligations and the role junior capital may play.
3. Apply through our lending partner for a discussion of relevant financing options.

When Subordinated Debt May Fit

Subordinated debt is generally more relevant to businesses evaluating a strategic transaction or complex capital plan than to routine short-term operating expenses. For equipment purchases or working capital, Equipment Financing or a Business Line of Credit may be more direct options to compare.

Subordinated Debt FAQs

What does subordinated debt mean?

It generally refers to debt that is repaid after senior obligations in a company’s capital structure.

When might a business consider it?

It may be discussed for acquisitions, recapitalizations, ownership transitions, or strategic expansion plans.

Can subordinated debt replace working-capital financing?

It serves a different purpose and is typically evaluated in the context of a larger capital plan.