Now is the Time to Consider Specialty Financing for Your Business Clients
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Fact-checked by: Bruce Sayer
As traditional lenders tighten access to credit, commercial and business bankers, commercial brokers, consultants, and private equity (PE) groups must explore broader funding options to help business clients extend their runway and stay growth-ready. Fortunately, the rise of specialty financing – especially around accounts receivable (A/R) financing and asset-based lending (ABL) – offers fast, flexible working capital with fewer covenants and greater availability than conventional loans.
These financing options are ideal for clients seeking liquidity without triggering refinancing events or giving up equity. As portfolio hold times lengthen and businesses outgrow their bank lines, understanding when and how to leverage specialty financing is key to aligning working capital with growth strategies.
The challenge
In 2025, businesses are navigating extended growth trajectories due to a confluence of economic, operational, and competitive challenges. Rising costs, margin pressures, and cautious lending environments are forcing many to expand cautiously, often without the support of traditional lenders.
Meanwhile ongoing tariff uncertainty, and global trade disruptions have fueled market volatility—creating pricing instability, straining supplier relationships, and complicating global sourcing strategies.
At the same time, private equity firms now hold portfolio companies for an average of 6.7 years, up from 5.7 years over the past two decades. According to McKinsey’s Global Private Markets Report, 61% of buyout-backed companies have been held for more than four years, a record high.
That’s where specialty lenders step in with financing options like A/R financing and ABL that offer flexible, scalable working capital based on asset value, bridging the gap left by traditional lenders.
Understanding specialty financing
Specialty financing provides liquidity based on the value of a business’s assets—such as receivables, inventory, or equipment—rather than relying on credit history or financial performance metrics. While these tools were once considered options for distressed companies, A/R financing and ABL have evolved into mainstream financing solutions for growth-stage companies and sponsor-based businesses alike.
Let’s take a closer look at each of these flexible alternatives:
Accounts receivable (A/R) financing
A/R financing allows businesses to unlock working capital tied up in outstanding invoices. Rather than waiting 30, 60, 90 or even 120 days for payment, companies can borrow against or sell their receivables to gain immediate cash. Unlike traditional lines of credit, A/R financing has greater availability and fewer restrictions.
Key benefits include:
- More availability: Advance rates can reach 90% or more for strong receivables – often exceeding traditional working capital lines.
- Fewer covenants: Facilities are often covenant-light or covenant-free, ideal for businesses under pressure or with variable performance
- Improved cash flow: A/R financing accelerates payment cycles, giving companies immediate cash to reinvest in operations.
- Non-dilutive capital: It does not require giving up equity, making it a preferred option for owners looking to maintain control.
- Scales with growth: As receivables grow, so does the facility size.
- Flexibility: Companies can choose which invoices to finance and how frequently to use the service.
- Support for bank carve-out: Works alongside existing senior debt, providing incremental capital when bank appetite is limited
- Non-notification options: Businesses can access funding without notifying their customers, helping maintain client relationships and control over collections.
A/R financing provides fast, flexible, and non-dilutive access to working capital, improving cash flow, supporting growth, and offering scalable, customer-credit-based qualifications.
Asset-based lending (ABL)
ABL is a broader form of secured financing that allows businesses to borrow against a range of tangible assets, such as receivables, inventory, equipment, and real estate. ABL facilities are structured with a borrowing base that evolves alongside the business’s assets, providing a larger, scalable solution.
Key benefits include:
- Higher credit limits: Due to the collateralized nature, ABL often provides more capital than unsecured loans or traditional credit lines.
- Broader collateral base: Uses multiple assets to support the borrowing base.
- Tailored structures: Facilities are customized around business cycles, seasonality, and specific industry needs.
- Competitive rates: Often lower rates than unsecured loans, especially for asset-rich companies.
- Supports complex needs: Ideal for companies undergoing transitions, acquisitions, or seasonal fluctuations.
Asset-based lenders are seeing a surge in business. Offering scalable, cost-effective financing, it is ideal for businesses with complex capital needs or undergoing transitions.
When to recommend A/R financing or ABL
When advising clients or managing portfolio companies, the structure and asset profile of the business should guide the recommendation.
- A/R financing is optimal for companies with high-volume invoicing, rapid turnover, and limited tangible assets – making it an ideal solution for growth-stage or service-based companies.
- ABL suits businesses with a diverse asset base—such as inventory, equipment, or real estate—and more complex borrowing needs.
Both options can be layered with existing senior debt – providing additional liquidity without the need to refinance or restructure core banking relationships. In addition, these financing options are backed by fintech capabilities, making them powerful tools for advisors and portfolio managers steering capital strategies through today’s volatile business environments.
The role of technology in specialty financing
One of the most significant advantages of specialty financing is the emergence of fintech lenders who have digitized and streamlined processes. Technology-based lenders have developed online platforms offering user-friendly dashboards, automated credit checks, and real-time analytics, making managing cash flow easier than ever.
Leading fintech lenders are streamlining funding processes, offering transparency and control that traditional lenders often lack. Clients and PE firms benefit from faster funding, clearer terms, and better integration with accounting systems. At the same time, brokers, bankers, and consultants gain a partner that can scale financing solutions as needs evolve. The best fintech lenders are solution-focused, forward-thinking, and experienced in the industries they serve.
Why experience matters?
Experience matters when choosing a lender because seasoned providers understand specific industries’ unique financial dynamics, challenges, and growth patterns. An experienced lender can structure tailored solutions, anticipate potential risks, and move quickly when timing is critical—all while maintaining transparency and trust. For brokers, bankers, consultants, and PE firms, partnering with a knowledgeable lender ensures a smoother process, better outcomes, and financing that truly aligns with client or portfolio needs.
Conclusion
As debt financing continues to evolve, commercial brokers, bankers, consultants, and private equity firms are in a pivotal position to guide clients and portfolio companies toward more agile and adaptive funding strategies. Specialty financing options like accounts receivable (A/R) financing and asset-based lending (ABL) have become essential financing solutions in addressing the capital needs of businesses navigating longer growth cycles, ownership periods, or market volatility. With fintech innovations streamlining processes and experienced lenders offering industry-specific insight, these solutions provide the speed, flexibility, and scalability required to support long-term success. In today’s landscape, choosing the right financing partner isn’t just about funding—it’s about unlocking strategic growth opportunities to keep companies moving forward.
Contact us to explore how our experienced team can structure tailored financing solutions that align with your growth strategies and industry demands.
Key Takeaways
- In today’s environment of extended growth cycles and longer PE hold times, brokers, bankers, consultants, and PE firms must expand their financial solutions to better support client needs and long-term strategies.
- A/R financing and ABL provide scalable capital solutions based on a business’s assets, which are not restricted by rigid credit or performance requirements typical of traditional loans.
- Experienced specialty lenders bring more than funding – they can tailor solutions, anticipate potential risks, and move quickly to address the capital needs of businesses navigating longer growth cycles, ownership periods, or market volatility.
- Partnering with an experienced fintech lender ensures access to fast, flexible capital – and the resources to easily manage and scale financing as business needs evolve.
ABOUT eCapital
At eCapital, we accelerate business growth by delivering fast, flexible access to capital through cutting-edge technology and deep industry insight.
Across North America and the U.K., we’ve redefined how small and medium-sized businesses access funding—eliminating friction, speeding approvals, and empowering clients with access to the capital they need to move forward. With the capacity to fund facilities from $5 million to $250 million, we support a wide range of business needs at every stage.
With a powerful blend of innovation, scalability, and personalized service, we’re not just a funding provider, we’re a strategic partner built for what’s next.
Miguel Serricchio
Miguel Serricchio is the Managing Director - Channel Development at eCapital, where he leads all sales and partnership initiatives across the business. He joined LSQ (now part of eCapital) in 2018 and has since curated many of the company's largest and most strategic referral sources, facilitated its largest invoice finance partnership, and is the company’s resident EXIM expert, spearheading the effort to create numerous Supply Chain Finance Guarantee programs for US exporters.
A 35-year veteran of B2B and international finance, Miguel has led service and technology innovation at some of the largest financial institutions across the globe, including Citigroup, and several national and regional banks in the United States. He holds a Bachelor of International Commerce in Economy/Finance from the Argentine University of Enterprise (UADE).
Miguel has also served on EXIM’s Council on Small Business, assisting SMBs with strategies to better compete in global marketplaces and guiding public policy to help American businesses.
