What is Subordinated & Unsecured Credit?
Subordinated and unsecured credit ranges from $50K to $20MM+ at Prime + 4–8%, with 6–36 month terms, no UCC filing on some products, and no personal guarantee on others. As of 2026, it's stretch capital — the layer that sits on top of an asset-based line or a real-estate mortgage when you've pledged everything else but still have a growth opportunity to fund. Subordinated debt lends at 1–5× EBITDA and is how layered-capital stacks actually get built.
How It Works
Subordinated and unsecured credit is stretch capital — the layer that sits on top of secured debt like an asset-based line, a real estate mortgage, or equipment financing. When the obvious collateral is already pledged but a growth opportunity still needs funding, this is the tool that extends the total available capital.
Subordinated debt is still secured by collateral but takes second position behind the senior lender, which means the senior lender gets paid first in any default. It typically lends at one to five times EBITDA — annual operating profit — depending on the strength of the cash flow. Unsecured debt takes no collateral at all: no lien, sometimes no personal guarantee. It is priced higher because the lender takes more risk, but it preserves flexibility for the senior lender below it.
A typical example: a business needs more than $1M of bridge capital quickly to close a transaction, but the existing asset-based line is already maxed against eligible collateral. A senior real estate piece plus an unsecured stretch on top can reach the number neither one alone could. Another common case is layering an unsecured term loan with an existing invoice revolver to fund inventory ahead of a tariff change, without unwinding the senior facility.
As of 2026, we structure these from $50K to $20MM+. Terms run six to 36 months, often interest-only on the bridge variants. Pricing is Prime plus 4–8% depending on structure, cash flow, and how deep in the stack the position sits.
Stretch capital costs more than the secured layer below it, by design. The relevant question is whether the additional dollars unlock enough value to justify the cost. When the answer is yes, this is the tool that makes the larger structure work.
Quick Facts
| Facility / Loan Size | Facility sizes from $50K to $20MM+, scaled to the size of the gap above your senior line |
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Key Features & Benefits
Facility sizes from $50K to $20MM+, scaled to the size of the gap above your senior line
Subordinated debt typically lends at 1-5× EBITDA — sized to cash flow, not collateral
Unsecured term and bridge products with no UCC filing on some structures
Personal-guarantee-free options on select products (rare, but real)
Sits behind a senior ABL, AR factoring line, or real-estate mortgage — designed to layer cleanly
Terms 6-36 months, often interest-only during the bridge period
Pricing roughly Prime + 4-8% as of 2026, depending on cash flow and lien position
Second-lien structures available for stacks that need a true secured stretch layer
Faster underwriting than senior secured products — days to a few weeks, not months
Bank-friendly: subordinated layers are often what makes the bank's senior deal possible at the size they're comfortable with
Pairs with: senior ABL, AR factoring, real-estate cash-out, equipment financing
Honest framing: this is the most expensive secured-stack layer by design — used when the incremental dollars unlock outsized upside
Subordinated & Unsecured Credit - Common Questions
Get answers to the most common questions about subordinated & unsecured credit
See It In Action
Real companies using Subordinated & Unsecured Credit to solve their capital challenges
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Other Funding Solutions
Working Capital Loans & Lines of Credit
A working capital loan is short-term, revenue-based financing of $100K to $10M+ that funds in 2 to 10 business days, priced at 1.25%–4% per month. As of 2026, it's the fastest way to cover payroll, inventory, or growth-driven cash gaps when a bank can't move quickly enough — and at the same speed as a merchant cash advance it costs roughly half as much because the payment is monthly rather than a daily extraction from sales.
Learn more about Working Capital Loans & Lines of Credit →Invoice Financing
Invoice factoring is the practice of selling unpaid B2B invoices to a factor for 75%–95% of face value within 24–48 hours, then receiving the balance (minus a 0.25%–1% fee per invoice) when the customer pays. As of 2026, pricing typically runs Prime + 1–6%, facility sizes range from $250K to $100MM, and the facility scales automatically with sales. Approval looks at your customers' credit rather than your tax return — which is why it works for growing companies whose financials don't yet tell the full story.
Learn more about Invoice Financing →Equipment Leasing
& Financing
Equipment leasing and financing covers $100K to $50MM+ of machinery, vehicles, or technology over 3–7 year terms, with advance rates of 70%–85% of liquidation value and pricing of Prime + 3–10%. As of 2026, financing the asset directly is almost always cheaper than drawing on a working-capital line for the same purchase. Sale-leaseback structures let you extract 50%–70% of the equity from equipment you already own without adding a new debt covenant.
Learn more about Equipment Leasing & Financing →