Services: Asset-Based Lending

Asset-based loans (ABL) enable your company to finance different assets. These include accounts receivable, machinery, inventory, and corporate real estate.

The line provides your business with immediate funds to pay for operational expenses, finance new orders, or make strategic investments.

Asset-based loans are an attractive option for small and middle-market companies who need a flexible financing solution. They have simpler qualification requirements than conventional financing and are easier to obtain.

For more information, fill out this form or call us toll-free at (877) 300 3258.

Note: Companies looking only to leverage their accounts receivable should consider sales ledger financing. The solution works like an ABL secured by A/R but has simpler qualification criteria and lower minimums.

How does asset-based financing work?

Asset-based loans can operate as revolving facilities, term loans, or a combination of both. The components of the ABL that are secured by accounts receivable and inventory operate as revolving lines. ABL components secured by machinery and other assets operate as term loans.

ABLs use a borrowing base, which is determined by the type and value of the collateral. The borrowing base determines how much financing you can use at a given time.

a) Accounts Receivable

Lines secured by A/R allow you to withdraw up to 85% of the eligible receivables at any time. The line is paid back as the invoices are paid through normal operations.

b) Inventory

Lines secured by inventory work like lines secured by accounts receivable. However, they allow you to withdraw around 50% of the inventory value. The percentage you can leverage depends on the type of inventory, its quality, and the appraisal method. These lines settle once the inventory is sold and the end client pays their invoice.

c) Machinery and other assets

Machinery and other assets are leveraged using a term loan structure. The borrowing base and availability depend on the asset type, marketability, and other factors.

You can learn more by reading “What is an Asset-Based Loan? How does it work?“

Clear benefits

Asset-based financing solutions have several advantages over other solutions. These include:

1. Improved liquidity
2. Flexibility
3. Quick deployment
4. Fewer covenants
5. Lower costs than comparable options
6. Simpler qualification criteria

To learn more about the benefits of our solutions, read “Advantages of Asset-Based Loans.”

Simple qualification

Asset-based lending facilities have simpler qualification criteria than comparable bank solutions. Qualification criteria include:

1. Must have a minimum of $1,000,000 A/R
2. Solid client base
3. Reliable financial statements
4. Reliable business processes
5. Seasoned management
6. Located in the USA/Canada

Common uses

One of the main advantages of using asset-based lending is that the solution is flexible and solves a number of business problems. Common uses include:

1. Working capital
2. Special assets
3. Distressed companies
4. Corporate acquisitions

Industries

We can work with companies that offer products and services to other businesses or government entities. Industries we work with include:

Get an instant quote

We can provide asset-based financing at competitive terms. For more information, submit this form or call us toll-free at (877) 300 3258.