Financing For Lenders - Solutions For Lender Finance Facilities

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GROWTH FINANCING - FINANCING ALTERNATIVE LENDERS IN CANADA

Boost your lending power with a tailored lender finance solution. Flexible credit facilities grow with your company’s success.

Alternative lending is a highly diverse field that brings opportunities to lenders and borrowers. There are many different types of loans and ways for diversification (e.g., by loan segment, credit quality, geography, security interest).

Well regarded firms such as Morgan Stanley agree that Non-bank lenders in the alternative lending industry have demonstrated their value, and consumers, businesses, and lenders benefit from the economic growth in alternative lending portfolios via a higher interest rate.

The only way to grow your business is by acquiring more capital, often from non-bank private capital. Sometimes this might mean traditional banking, but the reality is that each company has different needs for lending and financing to succeed. Let our tailor-made credit facilities get you where you want to be when it comes to your alternative business loans/consumer loan solutions.

7 Park Avenue Financial understands the unique financing needs of your business. We offer in-depth knowledge into what makes finance firms successful when it comes to the right funding source in Canada.

WHO QUALIFIED FOR LENDER FINANCING SOLUTIONS

Financing for both commercial lenders and consumer lenders is available via lender finance customized solutions...Businesses such as factoring firms, consumer lenders in the non-prime or subprime lending space and merchant cash advance firms are strong candidates. Auto financiers, real estate commission funding, personal loans, small business working capital loan providers, tax credit refund firms, etc., are all strong candidates. Leveraging loan portfolios creates more success for companies that lend directly.

Bank lending may no longer be an option for many firms: Utilize our deep understanding of the needs around your funding requirements in your business model.

THE LENDER FINANCE SOLUTION

Lender-to-Lender Loan Facilities offer a solid way to grow loan portfolios. With this financing, borrowing against your current eligible transactions in your current loans and then using that funding for new transactions provides new capital for new transactions

When using an LTLF (Loan To Lending Facility), there are no restrictions and lending isn't complicated when it's tailored specifically for individual companies' needs - let us help guide entrepreneurial firms like your business with flexible solutions that will allow growth of any size or type.

SOURCES OF CAPITAL FOR FINANCE / FINTECH FIRMS

As your finance company or fintech firm seeks business growth financing, you have multiple options. One option is to solicit capital from existing shareholders. Another possibility for direct growth funding is through "lender-to-lender" loans between financial institutions such as banks and non-bank lenders.

Private equity firms looking for high yield investments may be worth considering if your deal has potential upside that will outweigh the downside risk of dealing with firms who are focused on generating returns versus building long-term relationships.

THE COST OF LENDER FINANCING

A Lender-to-lender financing program offers an inexpensive option for traditional or fintech lenders looking to invest in their portfolios. With a lender-to-lender facility, you pay fixed interest rates and are not required to give up revenue shares from your portfolio of loans. Flexible operating lines of credit that fluctuate with the changes in your loan portfolio can be structured without incurring high costs on unused facilities.

This is a great opportunity for growing your business! This lender-to-lender loan facility will ideally give you the capital to help make your goals a reality. You don't need to worry about collateral because your existing loans act as security and allow you access to additional funds, so you have more flexibility with how much money you want or need to keep scaling business.

The 7 Park Avenue Financial team understands the needs of finance firms and offers various solutions tailored to each business lender's unique situation. Whether you need capital for growth or want an alternative source, we have the solution you're looking for.

Banks don't always have flexible lending options so loans designed to meet your specific financial goals - whether you're trying to grow markets through acquiring new customers or if you are experiencing unexpected growth challenges require lender funding that works.

WHAT IS THE LENDER FINANCING APPROVAL PROCESS?

Lender financing has the same risks as traditional asset lending facilities. The volume of receivables in a borrower's portfolio can quickly deteriorate and become uncollectable if proper controls are not implemented. A critical area that needs to be reviewed regularly is compliance documentation, including:

Lender financing is a great way to offer your customers the convenience of making payments online. However, you must be aware that there are potential risks involved in this type of lending facility, and these can include:

Guidelines for their underwriting process

With our years of experience in commercial lending, 7 Park Avenue Financial understands that your most important asset is your loan portfolio. We have unparalleled insight into how to unlock this value for you, so contact us today! Understanding the value of your loan portfolio and maximizing its potential is Job #1.

CONCLUSION

The world of specialty finance has changed dramatically. From the uncertainty brought on by the economy and pandemics and financial crises and market opportunities, and unparalleled technological progress, there is no shortage of challenges or opportunities for finance lenders in consumer and business finance.

FAQ: FREQUENTLY ASKED QUESTIONS

Lender-to-lender financing is the method in which lenders provide operating lines of credit or term loan facilities to traditional and fintech lenders who are engaged in consumer or commercial finance lending. The underlying portfolio of outstanding loans secures these advances.

How do finance companies structure capital?

Equity investment, Lender-to-lender financing via term loans and structured payment arrangements or even participating in syndications are the common methods of structuring and accessing capital for a finance firm. Some firms sell loan books as a source of financing, but by doing that, they relinquish revenues and profits associated with those sales.

Structuring facilities as a revolving line of credit allows you to draw funds and pay interest when the money is used in your loan portfolio. This allows for flexibility since you are not paying any kind of interest with this structure if it's unused. By comparison, it would cost more if structured as a term loan because there would always be an added cost even though no actual use was made, given that loan funds were not deployed.

Alternative lending platforms allow borrowers to fill gaps in their financing needs by borrowing from non-bank finance firms... As the asset class matured, institutional lenders such as banks became involved in this market because it was profitable. They leverage technology that gave some of these small-balance loans a chance at being funded seamlessly.

Through primary technology, alternative lenders connect with borrowers and individuals in need of funds. The industry has grown out of the idea that local communities can provide loans to one another rather than relying on banks or other formal lenders such as credit unions or commercial, finance institutions- a system called peer-to-peer lending.

Alternative financing began emerging from small consumer loans financed through individual investments (sometimes referred to as marketplace) during recessions when large banks tightened their requirements and made loan approvals more difficult.

Alternative Lending emerged because ordinary businesses were finding themselves without enough resources for their business needs.

There are alternative financing options for businesses and consumers looking to consolidate their debt or pay down a revolving credit card balance. An example is a short term loan, often an installment loan with lower interest rates and longer terms than borrowers will find with many credit cards as they repay the loan.

Consumers and businesses may seek alternative loans for many reasons, including seeking better terms from lenders offering amortizing repayment structures that allow them to repay debts more slowly and spread out costs accordingly. Alternative lending platforms offer these benefits by bringing together lenders and borrowers.

Alternative lending used to take a backseat and was seen as an unnecessary risk. But after the 2008 financial crisis, banks retrenched from consumer and small-business loans causing many people without access to traditional banking services and turned elsewhere for credit.

Alternative lenders saw this opportunity to grow their customer base by taking advantage of technology-enabled recruiting methods already popular with online shoppers before the crash.

Alternative lending has grown over time because it is one way businesses and consumers can get around strict regulations on bank borrowing. A lot of banks are leaving out low-income customers or financially challenged businesses.

Those who have been turned away from traditional banking can turn to alternative finance companies to fill some gaps left behind when these institutions pull back funding options like mortgages or personal and business lines of credit.

In a credit crunch or challenging economic times, alternative lenders are a large source of funding for ' Main street ' in Canada.

' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil

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FINANCING FOR LENDERS IN CANADA