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Asset Based Lending

Industry information

Asset Based Lending, or an asset based loan, can be structured as a revolving credit facility that allows companies to access the working capital available in their assets such as Accounts Receivable, Equipment and Inventory. ABL is typically for companies that have been in business for three years or more, proven management, a track record of performing a service or making a product and have an asset heavy balance sheet.

An asset based loan can also be structured as a term loan where the borrower obtains a loan based on something of tangible value, usually equipment. The borrower receives an influx of capital up front and pays it back over a predetermined period of time.

How does it work?

A revolving line of credit (revolver) is a loan that can be drawn down and repaid at the borrower’s will. The borrower grants SBF a security interest in the items being used as collateral such as Accounts Receivable, Equipment and Inventory. A value is given to each asset, and a percentage of the value of the asset is made available to the borrower as a line of credit. A typical structure for a revolver will make available 85% of the Accounts Receivable, 70% of Equipment and 50% of the Inventory value available. When the borrower needs additional working capital, they request an advance, and the capital is sent directly to the borrower’s bank account. You can request as much or as little capital as you would like depending on what your needs are at any given time. This allows you to control the amount of capital you have borrowed, thereby lowering the cost of financing.


*Turning your current assets into working capital
*When additional funding is requested, working capital is sent within hours
*The freedom to concentrate on your business and not working capital
*Simple one page application
*You choose how you would like to receive funds (wire, ACH or check)
*Controlling your cost of capital by only using the revolver when needed
*Your clients are not contacted by the financing company
*More access to capital than a Traditional Line of Credit

Contact Small Business Fundz today to discuss how Asset Based Lending can assist your company or fill out our application to get started!





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