Russ Stein was quoted in the article titled Banks will be conservative when it comes to lending for a while.  So... what are your options? written by Mary K. Pratt:

Nonbank financing ranges from asset-based funding, to angel investing, to debt financing, to selling shares to employees, to factoring and cash-flow lending. Each has a place in the financing market in 2010 as banks continue to be tight with their lending standards.

“Bank financing, venture capital, private equity all continue to be tough. But there are angel opportunities out there, which people are taking advantage of, as well as these alternative types of financing. That’s what I see happening,” said Russell N. Stein, chairman of the Corporate & Business Law Group at Ruberto, Israel & Weiner PC in Boston.

Stein said he has worked with clients who are using a variety of methods to get the cash they need. Each business owner has had to consider his or her own particular needs as well as the cost of each deal when choosing which route to take, he said. Some owners, for example, have turned to key employees to provide capital in exchange for ownership stakes, he said. These deals are limited to smaller private companies — $10 million or less —and involve key employees investing six figures or less.

“They’re not multimillion-dollar transactions,” he said. Nor are these deals creating ESOPs, or Employee Stock Ownership Plans, which are generally used by owners looking for liquidity.

Stein said he, too, sees some companies turning to nonbank financing options right now. He said some are factoring their accounts receivable, turning to cash-flow lending or working with specialty finance companies. Each of these options comes with a higher price tag than bank financing, but they still remain options for companies that need cash but can’t get a bank loan.

“That’s last-resort financing because the pricing on that is really high, but you might be in a situation where you must pay that premium,” he said.

The article addresses the issue that despite the rising amount of approved loans since 2007, many businesses still can't get a bank loan. It was published in the January 29, 2010 issue of Boston Business Journal.