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Asset-Based Lending (ABL) is an effective working capital solution when access to traditional bank financing is unavailable. ABL credit facilities can provide businesses with immediate funds and ongoing cash flow in the form of a revolving line of credit based on a percentage of the value of a company's eligible asset classes such as accounts receivable, inventory and machinery & equipment.
Unlike a term loan, you only pay interest on the funds you have drawn down, therefore making it cost-effective and less expensive than a term loan while also enabling greater overall flexibility and avoiding tense covenant restrictions. ABL facilities can be utilized for financing day-to-day operations, turnarounds, recapitalization / restructurings, capital expenditures, M&A or management / shareholder buyouts.
Transaction Size: $100,000 to $30,000,000
Advance Formula: Up to 90% advance on eligible accounts receivable. Up to 65% advance on eligible inventory, equipment or R.E.
Criteria: Sectors best suited for an asset-based facility usually come from business services, distribution, finance & insurance, manufacturing, mining, oil & gas, and staffing. Companies with revenues of around $1MM or higher qualify for ABL.
Features: Fast closings - term sheets can be delivered within 2 days or less. Minimal financial covenants. Daily access to credit line. Greater leverage. Custom-tailored towards your company's capital needs.