Second Position Business Loan: Access Capital While Keeping Your Senior Lender

A second position business loan could be the perfect solution when you need additional capital but already have existing financing in place. This type of subordinated debt works alongside your primary lender, giving you access to growth capital without disturbing your current banking relationships.

Noble Funding has specialized in second position business loans for over 20 years, providing junior capital solutions that complement rather than compete with your existing financing. Our A+ BBB rating and zero complaints since 2005 reflect our commitment to structuring deals that work for all parties.

What Is a Second Position Business Loan?

A second position business loan, also called junior debt or subordinated debt, is financing that sits behind your existing senior lender in the repayment hierarchy. In simple terms:

• First position (senior debt): Your primary lender, usually a bank or senior secured creditor, gets paid first via senior secured UCC-1 lien on all assets
• Second position (junior debt): The second lien lender gets paid after the senior debt is satisfied

This structure is also known as:

• Junior lien loan
• Second lien financing
• Subordinated debt
• Mezzanine financing (in some cases)

The key benefit is that second position lenders understand their place in the capital stack. They design their products to work with, not against, your existing financing.

Payment Structure

With second position financing:

1. You continue making regular payments to your senior lender
2. You also make payments to your second position lender
3. Both loans operate simultaneously
4. The subordination only matters if there is a default situation

Benefits of Second Position Business Loans

1. Access Capital Without Refinancing

You do not have to pay off your existing loan or go through a lengthy refinancing process. Simply add the second position loan to your capital structure.

2. Preserve Your Banking Relationship

Your bank relationship stays intact. Banks retain UCC-1 lien on all assets.

3. Faster Than Traditional Financing

Second position capital like Noble Funding offers can fund in days, not the months that refinancing would require.

4. Flexibility for Growth

Use the capital for any business purpose: working capital, acquisitions, equipment, expansion, or bridging cash flow gaps.

5. Higher Loan-to-Value Options

Because second position lenders specialize in junior capital, they can often provide financing when your senior lender is at their limit.

6. No Disruption to Operations

The process is streamlined. You get capital quickly without the disruption of changing your entire financing structure.

Who Benefits from Second Position Business Loans?

Growing Companies Near Their Bank Limit

If your bank has provided all the credit they can offer, a second position loan fills the gap without replacing your primary lender.

Businesses Facing Time-Sensitive Opportunities

When an opportunity requires fast capital, a second position loan can close in days while a bank refinance takes months.

Companies Making Acquisitions

Second position debt is excellent for funding acquisitions because it layers on top of your operating line of credit.

Seasonal Businesses

Companies with seasonal revenue fluctuations can use second position loans for working capital during peak preparation periods.

Government Contractors

Contractors with pending payments or new contract awards often need bridge capital. Second position loans provide this without disturbing their primary banking relationship.

Noble Funding: Second Position Business Funding Specialists

For over 20 years, Noble Funding has provided second position financing to companies across the country. Here is what makes us the right choice:

True Subordination

Our junior debt is fully subordinated to any bank or senior secured lender.

Fast Funding

We can provide $2 to $3 million in just 2-3 business days. Traditional refinancing could take months.

Significant Capital

Noble Funding offers second position loans from $300,000 to $10 million, supporting substantial business needs.

Flexible Terms

Choose 12, 15, or 18-month terms with six months of early payoff discounts. Match your repayment to your business cycle.

No UCC Filing Option

Our financing can be structured without UCC filings on your corporate assets, keeping your balance sheet clean.

No Personal Guarantee Options

We can structure deals without true personal guarantees, protecting your personal assets.

EBITDA Flexibility

Noble Funding works with companies that have positive or negative EBITDA. Current profitability is not the only factor we consider.

Proven Track Record

With over $1 billion funded and an A+ BBB rating with zero complaints since 2005, Noble Funding delivers results.

Common Uses for Second Position Business Loans

Working Capital Expansion

A distribution company with $20 million in revenue had a $3 million line of credit with their bank but needed an additional $1.5 million for inventory. Noble Funding provided second position financing that worked alongside their existing line.

Acquisition Financing

A business services company wanted to acquire a competitor but their bank could only cover 60% of the purchase price. Noble Funding’s second position loan filled the gap, enabling the acquisition.

Bridge to Larger Financing

A manufacturing company was in process for a major bank facility but needed immediate capital. Our second position loan bridged the gap until the larger facility closed.

Seasonal Inventory Purchase

A retail company needed $2 million for holiday inventory but their bank line was tapped. Second position financing enabled them to capitalize on the season.

The Second Position Loan Process with Noble Funding

Step 1: Initial Consultation

We discuss your business situation, existing financing, and capital needs. This call helps us understand if second position financing is the right fit.

Step 2: Documentation Review

We review your financials, including:

• Recent financial statements
• Existing loan documents
• Corporate tax return
• Bank statements

Step 3: Term Sheet

Within 24-48 hours, we can provide an offer outlining the proposed financing structure.

Step 4: Due Diligence

We conduct streamlined due diligence, coordinating with your senior lender as needed.

Step 5: Closing and Funding

Once approved, we can fund in as little as 2-3 business days. The capital hits your account, and you are ready to put it to work.

Frequently Asked Questions

How much can I borrow with a second position loan?

Noble Funding provides second position financing from $300,000 to $10 million. The amount depends on your business revenue and overall financial situation.

What are typical terms for second position loans?

Noble Funding offers 12, 15, or 18-month terms. We also provide six months of early payoff discounts, giving you flexibility if you want to retire the debt early.

Do I need collateral for a second position loan?

Requirements vary. Noble Funding can structure deals with no UCC filings on corporate assets and no true personal guarantees for qualified borrowers.

How fast can I get funded?

Noble Funding can fund in just 2-3 business days $300,000-$10 million for qualified borrowers. Speed is one of the main advantages of second position financing.

Is my business too small for a second position loan?

Noble Funding works with companies generating $5 million to $150 million in annual revenue. If your business falls within this range, we can likely help.

Get Your Second Position Business Loan

When you need capital but want to preserve your banking relationship, second position financing from Noble Funding is the answer.

Noble Funding advantages:

• 20 years of second position lending experience
• Over $1 billion funded to businesses nationwide
• A+ BBB rating with zero complaints
• Funding in days, not weeks
• $300,000 to $10 million available
• Works alongside your existing bank financing
• No personal guarantee options

Contact Noble Funding today to discuss how a second position business loan can provide the capital you need while keeping your senior lender in place. Your growth should not be limited by your primary bank’s capacity.