Asset Based Line of Credit or Term Loan
Secured by assets such as Accounts Receivable, Equipment, Inventory or Real Estate.
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Time to Funds
Benefits of Asset-Based Lending.
ABL provides a company with the necessary operating capital needed to function and grow. Asset-based lending typically includes fewer covenant restrictions thanks to its transparent reporting and monitoring between the lender and the borrower. ABL can also provide a predictable cash flow because it can be customized to the individual business’s needs.
What Is Asset-Based Lending?
Asset-Based Lendingis a type of commercial financing that occurs when a company pledges assets in exchange for a revolving line of credit based on a percentage of the value of those assets. Assets with a higher liquidity availability will typically have a higher loan-to-value ratio.
What Companies Are Good Candidates For ABL?
Companies that are asset-heavy are the best candidates for ABL. This typically includes manufacturers, distributors, and wholesalers, to name a few. It is also ideal for companies who experience seasonal lulls or cyclical fluctuations in their profits, have erratic earnings, or a marginal cash flow.
Specifically, we work with businesses that are engaged in creating business-to-business Accounts Receivable and need cash flow financing ranging from $25,000 to $50 million. Fill out our application to see which option best suits your business needs.
How Is ABL Different From Factoring?
Both asset-based lending and factoring provide working capital for companies to use at their discretion. While factoring acts as more of a sales transaction where a factor will purchase accounts receivable, asset-based lending functions as a revolving line of credit. While factoring is common among newer companies, asset-based lending is favored among better-established companies.
How Is ABL Different From A Traditional Bank Loan?
Asset-Based Loans are usually a good option for companies who are on their way to being able to secure a traditional bank loan. Many small business loans require companies to have a stellar credit history while remaining profitable. However, as you know, it takes money to make money. So, where does this leave companies who are in need of small business financing but do not meet the strict requirements needed to take out a business loan?
Unlike qualifying for a bank loan, your asset-based lender doesn’t focus so much on your credit history and revenue as they do on the value of your assets, making it a great option for companies that are growing faster than the cash is coming in or who have less-than-perfect credit. This allows companies who would otherwise not be able to take out a bank loan to still secure working capital.
How Can Asset-Based Loans Help My Business?
Asset-based loans can provide a number of cash flow solutions for small and medium-sized businesses. One of the main reasons firms choose asset-based lending is simply to provide more working capital during lulls in the cash flow cycle. This working capital can then be used for day-to-day operational costs.
ABL is also a great solution when you need relatively fast business funding for a merger or period of growth, who are undertaking a buyout, or even for companies facing bankruptcy.
After Applying, How Long Does It Take Before I Know If I Am Approved?
BizLender can approve you for Accounts Receivable Financing in as little as 24 hours after we receive your application and required documents.
My experience with BizLender has been very pleasant. They are very professional and keep in touch with you through their process of your loan. Thanks for the updates.