SUBORDINATED DEBT

Line Amount

$250K to $15M

Non-Disruptive

Complements senior lending

Time to Fund

24 to 48 hours

What is it?

Grow beyond credit limits

Subordinated debt (sub debt) gives you access to additional capital without refinancing or disrupting senior loans. It sits behind senior debt in repayment priority, making it a flexible tool for funding growth, acquisitions, or restructuring.

Who uses sub debt?

• Business owners: Fund growth, acquisitions, or optimize balance sheets.
• Private equity & M&A firms: Fill funding gaps in buyouts or recapitalizations.
• Commercial brokers: Offer non-dilutive capital solutions alongside senior debt.

Why get it?

Funding at your pace

Business moves fast. Your financing should, too.

Preserve ownership

Access growth capital without diluting equity or bringing in outside investors.

Fast access to strategic capital

Get funding quickly to fill capital gaps, support time-sensitive deals, or maintain growth initiatives.

Supports major growth moves

Use capital for acquisitions, recapitalizations, shareholder buyouts, or large-scale expansions.

Works alongside senior debt

Subordinated debt sits behind senior loans, making it ideal for layered financing strategies.

What’s the difference?

Senior debt vs Sub debt

feature	Senior Debt	Subordinated Debt
Repayment	Repaid first in default	Repaid after senior obligations
Collateral	Usually required	Often unsecured
Cost	Lower	Higher
Use Case	Primary working/growth capital	Fill funding gaps after senior is maxed

Fueling transactions, funding growth

We help you close complex deals by filling capital gaps others can’t.

M&A and Private Equity Groups

Our sub debt helps bridge capital shortfalls in acquisitions, leveraged buyouts, and recapitalizations, ensuring you have the funds to close deals successfully. We specialize in:

• Capital gaps – Filling capital gaps in buyouts, expansions, and balance sheet moves.
• Growth capital – Providing complementary capital alongside senior lending facilities.
• Turnarounds – Bolstering declining companies with working capital to support growth

ABLs & Factors

Asset-based lenders and factoring companies can use our Sub Debt to manage their balance sheets.

Here are a few examples of when these lenders would call upon National Business Capital:

• You’re trying to take on a new facility, but there’s a capital gap between the new facility amount and what’s owed to the senior lender. Using a subordinated loan, your client can cover the capital gap, and you can take on the facility by gaining the first lien position.
• A client needs capital in excess of their current facility, but the senior lender is unwilling to provide the client with additional capital. The client can leverage subordinated loans to obtain their requested over advance, while the senior lender retains the right to first lien position.
• You have a client who is no longer in the formula. You notify the client of the change, but they don’t have the capital to cover their existing facility. Instead of taking a loss or unwanted risk, debt subordination can bridge the gap to move the client off your books and satisfy all parties.
• If a prospective client applies for financing but has a first position lien against their assets, you can secure a subordinated loan to repay the senior lender and move their facility onto your balance sheet.