Lending Series | Part 6: Specialty Finance – Lending Beyond the Labels
And just like that, we’ve reached the final chapter of our Lending Series.
If you’ve been following along since our first entry on invoice factoring (complete with cash flow analogies and collateral talk), thank you if you’re joining us now — welcome to the least defined by design, most flexible corner of our private credit strategy: Specialty Finance.
This is the part of the portfolio where we lend to companies that don’t check the usual boxes, but do come to the table with solid collateral, thoughtful operators, and capital needs that make sense (even if they don’t fit neatly in a dropdown menu).
So, What Exactly Is Specialty Finance?
It’s our “miscellaneous drawer” but without the chaos.
Specialty Finance includes credit facilities backed by secured asset pools, marketable securities, cash reserves, or even enterprise value that can be quantified, verified, and protected. These deals tend to be:
- First lien
- Typically, up to 50-60% loan-to-value based on conservative fair market metrics
- Shorter term — up to two years
- Tightly structured with covenants and real collateral control
We’re not focused on the borrower’s sector; we’re focused on the structure. If the value is there, and we can secure it properly, we’re interested.
This vertical is where we get to be creative without ever being careless. It’s built for the businesses that don’t fit traditional lending molds and, frankly, don’t want to. What changes is how we adapt to the nuances of each borrower.
Our clients in this vertical are typically excellent operators, entrepreneurs running focused businesses with clear revenue lines, responsible financial management, and a unique capital need. And because rigid vertical definitions do not bind us, we can move quickly to evaluate the collateral, structure the deal, and deploy capital without compromising on discipline.
A Real-World Example: Lending for a Moment in Time
One recent Specialty Finance transaction involved a wealth management firm engaged in capital markets. On paper, it wasn’t a typical lending candidate, but we saw a particular opportunity to help.
The borrower requires temporary regulatory capital to support “bought deals” , where securities are pre-sold, and the risk of holding them is minimal. The capital was only required for a short time, but it had to be real, and in place to meet regulatory obligations.
We structured a $10 million senior secured facility, split between a term and revolving component. The funds were deposited into a segregated account, used solely to enhance the borrower’s Risk-Adjusted Capital.
The borrower’s stable revenue, strong equity position, and minimal balance sheet exposure made the deal a compelling fit (as well an estimated business value of approximately $75-100 Million). From time to time, the facility is upsized to accommodate specific transactions, providing the borrower with flexibility while ensuring our capital remains well-protected.
This is the essence of Specialty Finance: identifying real value—even if it looks different than a warehouse full of inventory or a list of accounts receivable—and building a credit structure that respects the uniqueness of the borrower without ever compromising on security.
Why This Vertical Reflects Who We Are
We like this kind of deal because it represents our mindset: not rigid, but resolute. We’re not here to force clients into templates. We’re here to solve capital problems with structure, speed, and care.
And for our investors, that translates into portfolio diversification without compromising credit quality. The assets might look different, but the rules don’t change secured, real collateral, clear exit.
Thanks for Coming Along
That’s a wrap on our Lending Series. Six verticals, real-world examples, and more insight into how we lend, why we lend, and what we stand for as a firm.
If you’ve enjoyed the series, we’d love to hear from you. And if you’d like to learn how our private credit strategies can support your portfolio or your clients’ capital needs — our door is open.
