Asset-Based Lending
Revolving credit secured by your accounts receivable, inventory, equipment, or real estate. Unlock substantial capital tied up in your balance sheet.
Overview
What Is a ABL?
Our Asset-Based Lending (ABL) program provides established businesses with substantial revolving credit secured by the value of their balance sheet assets. Unlike traditional cash flow lending that focuses on EBITDA and credit ratios, ABL underwriting is driven by the value of your collateral, including accounts receivable, inventory, machinery, equipment, and in some cases commercial real estate. This makes ABL particularly powerful for asset-rich businesses experiencing rapid growth, recovering from a turnaround, or executing a major transition. Facilities range from $500,000 to $50,000,000, with borrowing bases that scale dynamically as your collateral grows. Advance rates typically reach 85% on eligible receivables, 50% to 70% on inventory, and 70% to 80% on appraised equipment. Our advisors design facilities that maximize liquidity while preserving the operational flexibility you need to execute your strategy.
Key Features
- Revolving credit facilities from $500,000 to $50,000,000
- Advance rates up to 85% on eligible accounts receivable
- Inventory advance rates of 50% to 70% based on category
- Equipment and machinery financing up to 80% of appraised value
- Borrowing base grows as your asset base grows
- Lower cost of capital than unsecured alternatives
Process
How It Works
Initial Assessment
Our team conducts a comprehensive review of your balance sheet, financial statements, and operating history. We identify the asset categories most suitable for inclusion in the borrowing base and discuss your liquidity objectives.
Field Examination & Appraisal
A field examination team verifies receivables aging, inventory composition, and equipment condition. Independent appraisals are commissioned where appropriate to establish defensible advance rates.
Facility Structuring & Closing
We structure the revolving credit facility, including advance rates, eligibility criteria, financial covenants, and reporting requirements. Closing typically occurs 30 to 60 days from initial application, depending on transaction complexity.
Ongoing Borrowing & Monitoring
Once closed, you draw against the borrowing base as needed and submit regular collateral reports. Periodic field exams and audits ensure the facility remains aligned with your evolving asset base, with capacity that grows alongside your business.
Benefits
Why Choose a ABL?
Significantly higher borrowing capacity than cash flow loans for asset-rich businesses
Lower interest rates due to the secured nature of the facility
Borrowing capacity scales automatically with business growth
Flexible covenants compared to traditional bank financing
Suitable for complex transactions including acquisitions and turnarounds
Eligibility
Qualification Requirements
- Minimum 24 months in business with audited or reviewed financials
- Annual revenue of at least $5,000,000
- Identifiable, valuable, and well-managed asset base
- Active accounts receivable ledger with creditworthy customers
- Willingness to provide periodic collateral reporting and field exams
Use Cases
Common Uses
- Funding rapid growth that outpaces traditional credit capacity
- Financing acquisitions, recapitalizations, and management buyouts
- Supporting business turnarounds and operational restructurings
- Refinancing higher-cost short-term debt with a single ABL facility
- Providing seasonal liquidity for inventory-intensive businesses
- Supplementing senior credit facilities with additional borrowing capacity
FAQ
ABL Questions
Traditional bank lines are typically underwritten on cash flow metrics like EBITDA and debt service coverage, with relatively rigid covenants. ABL is underwritten on the liquidation value of collateral, allowing for substantially higher borrowing capacity for businesses with strong asset bases but volatile or temporarily depressed earnings. Covenants in an ABL facility focus on collateral quality and reporting rather than financial performance ratios.
The most common ABL collateral categories include accounts receivable, finished goods inventory, raw materials, machinery and equipment, and in some cases commercial real estate or intellectual property. Each asset class is assigned a specific advance rate based on its liquidity, marketability, and historical performance. Our advisors work with you to identify which assets in your business will generate the most borrowing capacity.
ABL facilities typically require monthly borrowing base certificates summarizing eligible collateral, monthly accounts receivable agings, monthly inventory reports, and periodic financial statements. Larger facilities may also include quarterly or semi-annual field examinations and inventory appraisals. While the reporting burden is more substantial than an unsecured loan, our advisors help you implement efficient processes to minimize the administrative impact.
ABL closings typically take 30 to 60 days from the time complete information is provided. The timeline includes initial underwriting, field examination, third-party appraisals, legal documentation, and lien perfection. More complex transactions, particularly those involving multiple jurisdictions or layered capital structures, may take longer. Our team manages the process closely to keep closings on schedule.
Yes. ABL frequently sits alongside subordinated debt, mezzanine financing, or equipment-specific term loans within a broader capital structure. We can also coordinate with senior bank lenders or junior capital providers to design layered facilities that meet your full capital requirements. Our advisors specialize in structuring multi-tranche transactions for businesses with complex capital needs.
Ready to Get Started with a ABL?
Apply today and a funding advisor will walk you through your options.