Lender Finance
Lender finance provides working capital or warehouse capacity to companies that originate financing: a factor, another specialty originator, or a similar platform. The collateral is that company’s own portfolio of advances, not the end customer’s P&L. Conventional banks often will not take that book. Specialty lenders will, against eligibility, dilution, servicing, and concentration.
Terms and facility size sit on the Specialty Finance page.
How This File Is Underwritten
The lender underwrites the originator and how their book performs.
- What the originator funds: Invoice factors, other receivable buyers, and similar platforms are the usual fit. The end-borrower product has to be understandable and reportable.
- Eligibility and dilution: Which assets enter the base, what ages out, chargebacks, fraud, and how often the book is marked.
- Servicing: Who collects, who reports, and whether the warehouse lender can see the portfolio.
- Portfolio performance: Historical collections, delinquency, losses, recoveries, and portfolio turnover.
- Concentration: One end customer, one industry, or one originator product can cap the line.
- The originator’s own operations: Underwriting quality, compliance, and capital already in the book.
This is for companies that factor other companies’ invoices and need more capacity. If the company is the operating business, use invoice factoring or ABL.
What Usually Binds
- Eligible, performing assets in the originator’s portfolio
- Dilution and aging
- Concentration in the underlying book
- Servicing and reporting quality
- Existing warehouse, senior, subordinated, or other financing facilities
What To Send First
- Description of the product the originator funds
- Portfolio tape, including balances, aging, delinquency, concentration
- Historical dilution and loss
- Originator financials
- Debt schedule and existing warehouse or senior line
- Servicing and reporting package
- Credit policy summary
When This Is The Wrong Product
An operating company that needs a line on its invoices wants ABL or factoring, not lender finance. A healthcare provider wants the healthcare receivables page. A law firm wants litigation finance. Lender finance starts when the borrower is already a funder.
FAQs
Is this a warehouse line?
That is the usual shape: advance against a defined eligible book, with reporting and reserves. Exact structure follows the originator and the senior lender.
Can it sit behind an existing senior?
Sometimes, with an intercreditor agreement. Many files are a takeout or a single warehouse so one lender runs the tape.
Do you finance the originator’s clients directly?
No. This page is the originator’s line. The client relationship stays with the originator.