Teaching a very small class when the students have very uneven proficiency levels
Having been that "advanced student" in a similar situation, I'd like to point out that in such a small class environment, there is really no reason that this shouldn't be an ongoing discussion between all three participants, throughout the duration of the course. Everyone has their own pace. In truth, everyone has their own pace through individual topics. 

With a little open communication you can likely resolve this in a manner that is appropriate to the particulars of your context. In my case, I had been worried about the student that I felt was falling behind. I not only didn't worry about going a bit slower in class, but I also invited him to a once-a-week study group between the two of us. I've found that teaching concepts is the best way to cement them myself. The entire experience was quite fulfilling, and I consider the course to be a complete success - even from a purely personal educational perspective.

Your situation will be different, obviously, but the I think the only real answer is consistent, open dialog.