Situational Capital Term Loans
Special Situations Capital for Non-Traditional Financing Needs
Learn About Our Situational Capital Loan Solutions
Situational Capital term facilities are typically subordinated debt solutions providing growth capital and special situation financing without the restrictions of a traditional bank. These are non-dilutive options for special situations that do not conform to traditional bank or asset-based lending. Our non-dilutive options are ideal for companies or sponsors seeking to preserve equity.
Loan Amounts Start at $500,000, Rates start at 10%
Structured Cash Flow
- Structure: First lien, second lien, unitranche
- Underwriting: Fixed charge >1.10, Leverage < 3x (can use proforma EBITDA)
- Point of Difference: $1,000,000 to $5,000,000 check size sweet spot is tough to solve for, typically financing non-sponsor backed / family owned businesses that don’t attract other credit funds
Collateral Based – non-conforming ABL (can underwrite AR, inventory, IP, M&E and RE)
- Structure: First Lien, split lien
- Underwriting: Third party verification of collateral values subject to appropriate advance rates
- Point of Difference: Deals that don’t qualify for lower cost pricing or are in need of over-advance / more flexibility than conforming ABL
Guarantor Based
- Structure: First lien, second lien, unsecured. Wide range based on business and PFS profile.
- Underwriting: PFS assets / net worth
- Point of Difference: Guarantor does not qualify for private banking and/or requires speed to close
Recurring Revenue – primarily SaaS businesses
- Structure: First lien, second lien
- Underwriting: Recurring revenue metrics, EV, and RML
- Point of Difference: Non-dilutive, ability to be second lien, don’t require institutional VC, can scale loan size with company growth
Special Situations – opportunistic note purchases from banks/credit funds
- These deals typically fit into one of the buckets above
Situational capital is one of our business term loans. For short-term funding that will be refinanced or repaid from a liquidity event, see term bridge loans; for financing based on the reliability of your revenue streams, see cash flow loans. Complex financing for middle-market companies is also available through our debt capital advisory service.
Situational Capital FAQs
What is situational capital?
Situational capital term facilities are typically subordinated debt that provides growth capital and special situation financing without the restrictions of a traditional bank. They are non-dilutive options for situations that do not conform to traditional bank or asset-based lending, suited to companies or sponsors that want to preserve equity.
How much can a business borrow with situational capital?
Loan amounts start at $500,000, and rates start at 10%. For structured cash flow loans, the $1–5 million range is a particular focus, typically for non-sponsor-backed or family-owned businesses that don’t attract other credit funds.
What structures are available?
Structured cash flow facilities can be first lien, second lien or unitranche, underwritten to a fixed charge coverage above 1.10 and leverage below 3x. Other options include collateral-based non-conforming ABL, guarantor-based loans and recurring-revenue loans, primarily for SaaS businesses.
Why Work with Commercial Finance Partners?
- Leverage Existing Assets
- Increased Working Capital
- Creative Deal Structure
- Alternative to Equity
- Growth Focused
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