Lenders of Last Resort

October 23, 2023

Over the last few weeks, we discussed private financing options for companies that are typically in growth mode.  On the other side, there are situations when businesses need money in the short term or have little to no credit history.  While it’s not always the case, business owners have no other option than to use the “lenders of last resort”.  Below are a few of these alternative forms of financing.

  1. Private Third-Party Loan – This type of loan is where you are literally borrowing from another individual or entity with terms and conditions that a commercial lender would provide; Rates are higher than normal and the terms can be a bit more onerous; Typically, business borrowers go down this path if they have poor or no credit history;
  2. Hard Money Loans – This financing option can take the form of using your business assets as collateral for a short-term loan; Asset-backed loans would be an example of this type of structure (e.g., you pledge your accounts receivable); a business may also use this type of loan to bridge the gap on a project until a traditional commercial financing option can be secured (e.g. construction projects);
  3. “Tony Soprano” Loan – The last option is to go and ask your local loan shark.  I would not recommend that path as the collection provisions may be a bit painful.

All kidding aside with option number three above, businesses pursuing the “lenders of last resort” are usually in some type of financial hardship or provide products or services that are high risk.  As always, whatever financing you are pursuing, be sure you consult your professional business advisors.

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (, Andy Miller (, Christian Miller (, Erik Spurlin (, Brad Leber ( or anyone in our office with questions or comments.  

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