A non-bank lender does not offer deposit, checking, or savings services. They use their own capital or investor capital to lend, typically to higher risk customers.
You see Hilco described as a diversified financial services firm which says it provides “creative financing solutions” to businesses - aka a non-bank lender.
The non-bank lender risk is to borrowers seeing their credit cut-off. Per the BIS (Bank for International Settlements) - https://www.bis.org/publ/work1074.htm
Since the Great Financial Crisis of 2007–09, non-bank financial institutions have steadily increased their global footprint, now accounting for half the global financial system's assets.
While having a lending relationship with a bank benefits borrowers, relationships with non-banks – whether measured by duration or intensity – do not improve borrowers' access to credit during crises.
The rise of non-banks could therefore exacerbate the repercussions of financial crises, as it leads to a shift from relationship towards transaction lending.
Non-bank lenders cut their syndicated credit by significantly more than banks during the 2007-09 crises, even after accounting for time-varying lender and borrower characteristics.
Companies, like those accounting for most stock market gains AAPL MSFT GOOGL AMZN TSLA, all have billions in cash and don't need non-bank lenders.
Companies closer to being in trouble like 3M or J&J, car dealers and certainly Bed Bath & Beyond, could see their access to non-bank capital suddenly dry up in a panic as non-bank lenders and their investors don't like losing money.
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