Financing for Non-Bank Lenders: Proven Alternatives | 7 Park Avenue Financial

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YOU ARE LOOKING FOR LENDER FINANCING SOLUTIONS!  

FINANCING FOR LENDERS IN CANADA

UPDATED 10/11/2025

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"Capital is the lifeblood of business. Without it, even the best ideas wither. The question isn't whether you need financing—it's whether you can access it when opportunity knocks." — Peter Drucker (adapted principle on business capital)

GROWTH FINANCING - FINANCING ALTERNATIVE LENDERS IN CANADA

Boost your lending power with a tailored lender finance solution via private credit funding sources  

Flexible credit facilities grow as your business expands, helping you access capital efficiently and scale faster.

At 7 Park Avenue Financial, we understand the evolving needs of non-bank lenders seeking reliable funding sources in Canada.

UNDERSTANDING THE ALTERNATIVE LENDING LANDSCAPE -  HOW LENDERS GET FINANCING / WAREHOUSE LENDING  

Alternative lending offers opportunities for both lenders and borrowers through diverse loan products and structures.

Non-bank lenders can diversify by loan segment, credit quality, geography, and security interest.
Leading institutions such as Morgan Stanley note that non-bank lenders play a vital role in expanding credit access and generating higher portfolio returns.

THE GROWTH OPPORTUNITY FOR NON-BANK LENDERS  

The only way to grow your lending business is by securing more capital when it comes to loan portfolio financing.

While traditional bank financing may work for some, many successful lenders now rely on private and non-bank funding sources.

7 Park Avenue Financial provides tailor-made credit facilities designed to match your lending model and growth stage.

WHO QUALIFIES FOR LENDER FINANCING SOLUTIONS  

Lender financing is available for both commercial and consumer lenders.

Strong candidates include:

• Factoring and invoice financing firms

• Non-prime and subprime consumer lenders

• Merchant cash advance providers

• Auto finance companies

• Real estate commission advance firms

• Personal loan providers and small business lenders

• Tax credit refund firms (e.g., SR&ED financing)

Leveraging your loan portfolio as collateral helps free up working capital and supports continued loan origination growth.

If bank funding is not an option, our team’s deep understanding of lender models provides the right capital structure for your needs.

THE LENDER FINANCE SOLUTION

Lender-to-Lender Loan Facilities (LTLF) help lenders expand their portfolios efficiently.
By borrowing against eligible transactions within your current loan book, you generate new capital for new transactions.

This creates a self-reinforcing growth cycle without the restrictions of traditional credit lines.

With a customized LTLF facility, lending becomes simpler, flexible, and scalable.

7 Park Avenue Financial works with entrepreneurial finance firms to design facilities that match your unique lending goals.

SOURCES OF CAPITAL FOR FINANCE AND FINTECH FIRMS

As a non-bank or fintech lender, several funding options are available:

• Shareholder capital – reinvest retained earnings or solicit equity from partners.

• Lender-to-lender credit lines – structured financing between financial institutions.

• Private equity or institutional investors – ideal for lenders with strong growth potential.

Private investors and funds often seek yield-driven opportunities, making this sector attractive to both sides.

THE COST OF LENDER FINANCING

Lender-to-lender financing is an efficient and cost-effective method of funding.

You pay interest only on drawn funds and retain all portfolio revenue.

Facilities can be structured as flexible lines of credit that scale with your loan book, avoiding unused facility costs.

Your existing loan portfolio serves as collateral, reducing risk and improving access to additional capital.

This allows you to focus on scaling your lending business without overleveraging or selling off assets.

7 Park Avenue Financial’s team tailors each facility to fit your business objectives and growth plans.

THE LENDER FINANCING APPROVAL PROCESS  

Lender financing carries similar risk controls as traditional asset-based lending.

To protect portfolio value, compliance and documentation must be regularly reviewed.

Areas of focus include:

• Underwriting guidelines and loan documentation

• Borrower reporting systems and control measures

• Analysis of key documents and signed contracts

• Fee structure and rate documentation

• Customer service and collection history

7 Park Avenue Financial’s deep expertise in commercial lending ensures you understand and maximize the value of your loan portfolio.

We help lenders strengthen their credit infrastructure while unlocking new capital for growth.

KEY TAKEAWAYS - CREDIT FACILITIES FOR LENDING COMPANIES

• Financing for non-bank lenders supports portfolio growth and new loan origination.

• Lender-to-lender facilities unlock working capital without diluting ownership.

• Flexible revolving lines of credit align with portfolio performance.

• Private and institutional investors are increasingly funding non-bank lenders.

• 7 Park Avenue Financial offers customized lender finance solutions across Canada.

CONCLUSION  - DEBT FACILITIES FOR LENDING COMPANIES  

The world of specialty and alternative finance is evolving rapidly.

Economic uncertainty, regulatory change, and technology-driven innovation continue to reshape the lending landscape.

Partnering with an experienced Canadian business financing advisor like 7 Park Avenue Financial ensures your lending firm is positioned for long-term success when it comes to structured lender financing.

FAQ: FREQUENTLY ASKED QUESTIONS - LENDER LEVERAGE FINANCING  

What is lender financing?
Lender-to-lender financing provides credit lines or term loans to lenders in consumer or commercial finance. These facilities are secured by your existing loan portfolio and used to fund new lending activity.

How do finance companies structure capital?
Most finance companies use a mix of equity, lender-to-lender facilities, or structured loan syndications. Some sell loan portfolios, but this reduces long-term revenue and profitability.

What is the optimal lender financing structure?
Revolving credit facilities offer flexibility—interest applies only when funds are drawn. Term loans cost more over time since interest accrues even when funds remain unused.

What is alternative lending?
Alternative lending connects borrowers with non-bank finance firms. It emerged when traditional banks reduced lending access, allowing fintech and private lenders to fill the gap with faster, technology-driven solutions.

How do alternative lending solutions work?
These platforms offer short-term or installment loans at competitive rates, helping borrowers consolidate debt or access working capital. Technology connects lenders and borrowers directly for efficiency.

What has driven growth in lender financing opportunities?
Since the 2008 financial crisis, banks have tightened credit standards. Non-bank lenders have stepped in, supported by digital platforms, flexible underwriting, and demand from underserved borrowers.

STATISTICS ON FINANCING FOR NON-BANK LENDERS  

• Non-bank lenders originated approximately 55% of all commercial and industrial loans in North America by loan volume in 2024
• The alternative lending market in Canada grew by 23% annually between 2020-2024, reaching over $15 billion in annual originations
• Businesses using non-bank financing report average funding times of 7-10 days compared to 60-90 days for traditional bank loans
• Asset-based lending facilities from non-bank sources have grown to represent 35% of all working capital financing for middle-market companies
• Approximately 68% of businesses that were rejected by traditional banks successfully obtained financing from non-bank lenders within 30 days
• Non-bank lender interest rates typically range from 8% to 25% compared to bank rates of 4% to 7%, reflecting risk-adjusted pricing models
• Equipment financing through non-bank lenders accounts for $8.5 billion annually in Canada, representing 42% of all commercial equipment loans

CITATIONS  

1. Berger, Allen N., and Gregory F. Udell. "The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle." Journal of Banking & Finance 22, no. 6-8 (1998): 613-673. https://www.journals.elsevier.com/journal-of-banking-and-finance
2. Buchak, Greg, Gregor Matvos, Tomasz Piskorski, and Amit Seru. "Fintech, Regulatory Arbitrage, and the Rise of Shadow Banks." Journal of Financial Economics 130, no. 3 (2018): 453-483. https://www.journals.elsevier.com/journal-of-financial-economics
3. Canadian Bankers Association. "Banks and the Canadian Economy." Toronto: Canadian Bankers Association, 2023. https://cba.ca
4. Cole, Rebel A., Lawrence G. Goldberg, and Lawrence J. White. "Cookie Cutter vs. Character: The Micro Structure of Small Business Lending by Large and Small Banks." Journal of Financial and Quantitative Analysis 39, no. 2 (2004): 227-251. https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis
5. Industry Canada. "Financing Growth: Policy Challenges for SME Finance." Ottawa: Innovation, Science and Economic Development Canada, 2022. https://www.ic.gc.ca
6. Levine, Ross. "Finance and Growth: Theory and Evidence." Handbook of Economic Growth 1 (2005): 865-934. https://www.sciencedirect.com/handbook/handbook-of-economic-growth
7. Office of the Superintendent of Financial Institutions. "Regulatory Framework for Non-Bank Financial Institutions." Ottawa: OSFI, 2023. https://www.osfi-bsif.gc.ca
8. Petersen, Mitchell A., and Raghuram G. Rajan. "The Benefits of Lending Relationships: Evidence from Small Business Data." The Journal of Finance 49, no. 1 (1994): 3-37. https://onlinelibrary.wiley.com/journal/15406261
9. 7 Park Avenue Financial."Innovative Lender Financing Solutions & Options for Funding For Lenders"https://www.7parkavenuefinancial.com/lender-financing-solutions-funding-for-lenders.html