Asset-Based Lending

Asset-based lending (ABL) is a revolving line of credit secured by your company’s working assets, usually receivables and inventory, and sometimes equipment. As your sales and assets grow, the amount you can borrow can grow with them.

How an ABL Line Works

• Borrowing base — your available credit is calculated from eligible assets. Lenders advance a percentage of your receivables and a lower percentage of your inventory.
• Revolving access — draw funds as you need them and pay the line down as customers pay you.
• Regular reporting — lenders typically ask for receivables agings, inventory reports, and a periodic borrowing base certificate, along with periodic field exams.

A Good Fit For

• Manufacturers, distributors, and wholesalers
• B2B companies growing faster than their bank line allows
• Businesses that build inventory ahead of busy seasons
• Companies going through an acquisition, refinance, or turnaround

ABL vs. Factoring vs. a Bank Line

• Factoring — you sell individual invoices. Often a fit for smaller or newer companies.
• Asset-based line — you borrow against receivables and inventory together and keep control of collections. Usually a fit for established companies with larger credit needs.
• Traditional bank line — based on cash flow and financial covenants. Can be the lowest-cost option when your financials qualify.
• SBA CAPLines — SBA-backed working capital lines through participating banks for qualifying smaller companies.

What Lenders Typically Review

• Receivables aging and customer concentration
• Inventory type, turnover, and reporting
• Financial statements and projections
• Existing debt and liens

Advance rates, fees, and minimum line sizes vary by lender. ABL lines also carry ongoing monitoring and field exam costs, which we walk through with you up front.

How We Help

We work with bank and non-bank ABL lenders, compare structures and all-in costs, and help you prepare the reporting lenders expect, so you can choose the line that fits your company’s size and growth plans.