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What is Secondary Lending and/or Gap Financing?

SLF funds are not intended to be used as stand-alone loans, or sole funding; they’re designed for gap financing, as SCEC is what is known as a Secondary Lender.

“Gap financing” covers the “gap” between what a lender will lend you and what you need to complete your business project. For example: If you secure 80%-90% of your project costs, the remaining 10%-20% is considered gap financing. It is not uncommon to see more than two participating lenders in larger loans.

By law, SCEC loans are not designed to compete with the banks and other financial institutions. They are intended to complement existing resources.

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