Second position factoring: working capital from your invoices, without touching your bank loan.
Many factoring companies turn you down if you already have a bank term loan, because the bank is first in line. 1st Commercial Credit's second position program buys your invoices while your term loan stays exactly where it is, and it doesn't ask your bank to subordinate.
Daniel Chirino · Business Development Officer, 1st Commercial Credit
Updated: October 28, 2026
Who it's for
- Businesses with an existing bank term loan, including SBA loans, that need more working capital.
- In good standing, profitable and growing.
- Selling to other businesses on 30 to 90 day terms.
- Especially in manufacturing, staffing, distribution and transportation.
Even with a bank term loan in place, many businesses still struggle with cash flow. Too often the owner is turned down for factoring because of the bank's senior position, and ends up with a high-cost merchant cash advance. Second position was built for exactly that gap.
How second position factoring works
Your bank loan stays
Your term loan and your bank relationship don't change. The program doesn't require subordination from the bank.
1st Commercial Credit buys your invoices
At a discount. It's a sale, not a loan: no new debt on your balance sheet and no new covenants.
Your customers pay 1st Commercial Credit
For the invoices it bought. You get working capital now instead of in 30 to 90 days.
Who it's not for
It doesn't work if
- Your bank financing is a line of credit, not a term loan.
- You have a merchant cash advance. Second position works behind a term loan, not behind an MCA.
- Your senior lender requires, or has told, your customers to pay into a dedicated lockbox.
- The business isn't in good standing, profitable and growing.
If your loan is an SBA EIDL
EIDL loans from the SBA have been subordinated, and 1st Commercial Credit starts funding before the SBA subordination process is complete.
With any other SBA loan, like a 7(a), tell me the details and I'll check how it fits.
Source: "1st Commercial Credit Introduces 2nd Position Factoring Behind Traditional Banks", published by 1st Commercial Credit on October 12, 2026 (author: Raul Esqueda, President), read October 28, 2026, and the program sheet Daniel published on LinkedIn on July 28, 2026. Terms are confirmed in writing before you sign.
A real deal
Published by Daniel on LinkedIn. See all deals.
For bankers
If your client needs more working capital than you can lend, second position lets it get cash from its receivables while it keeps its term loan with you, without a subordination request.
If you want to refer a client, here's how referrals work.
Questions owners ask me about second position
Is it a loan?
No. 1st Commercial Credit buys your invoices at a discount, so it doesn't add debt to your balance sheet.
Does my bank have to subordinate?
No. The program works alongside your term loan without requiring subordination from the bank.
I have a line of credit with my bank. Can I use it?
No. Businesses with a bank line of credit don't qualify for this program. It's designed for term loans.
What if my lender has my customers pay into a lockbox?
Then it doesn't qualify either. Tell me how your loan is set up and I'll tell you if there's another way.
Do you have a term loan or a line of credit?
Tell me what kind of loan you have and who your customers are. I'll tell you if second position works for you.
Also read: how invoice factoring works · trucking · all industries