Asset Based Lending

Asset Based Lending Refers to A Business Loan Secured by Using A Company’s Assets as Collateral. This Allows A Company to Immediately Access the Working Capital Available in Their Assets, Such as Accounts Receivable, Equipment and Inventory. Asset Based Loans Can Be Structured as Revolving Credit Facilities, Allowing A Company to Borrow from Assets on An Ongoing Basis to Cover Expenses or Investments as Needed. Asset Based Funding Is Used by Companies That Need Working Capital to Operate or Grow, In Some Instances These Businesses May Have Reached the Limit on Their Bank Line of Credit. Often, Companies That Implement ABL Have Cash Flow Problems, Many of Which Stem from Rapid Growth. Asset Based Lending Facilities Help Companies Manage Their Rapid Growth Issues and Position Them in A Favourable Position for Future Growth.

Happy Financial Group Will Establish A Revolving Line of Credit to Maximize the Availability of Working Capital from The Company’s Asset Base. The Borrower Then Grants Happy Financial Group 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 Revolver Structure Will Make Available 90% Of the Accounts Receivable, 75% Of Equipment, And 50% Of the Inventory Value.

When the Borrower Needs Additional Working Capital, They Request an Advance, And the Capital Is Sent Directly to The Borrower’s Bank Account. The Borrower Can Request as Little or As Much Capital, Depending on What Their Needs Are at Any Given Time. This Allows for Control of The Amount of Capital Borrowed, Thereby Lowering the Cost of Financing. As the Borrower Manufactures or Acquires New Inventory, And as They Generate Receivables from Sales, These New Assets Become Available for Inclusion in The Borrowing Base. The Line of Credit Is Then Paid Down Overtime by Collecting on Inventory and Outstanding Receivables.

An Efficient Way to Borrow

Because Your Assets Are Used as Collateral, Asset-Based Financing Can Be A Cost-Effective Solution That Enables You to Maximize Borrowing Capacity and Meet Liquidity Needs. Using A Consultative Approach, We’ll Help You Leverage the Value of Assets to Position Your Company for Future Success.

Use Asset-Based Lending Solutions For:

  • Working Capital
  • Merger and Acquisition Financing
  • Recapitalization
  • Refinancing/Restructuring Existing Debt
  • Leveraged Employee Stock Ownership Plans (ESOP)
  • Turnaround Financing

Asset Based Lending Parameters

  • Businesses with Revenues $25 Million+
  • Credit Facilities From $5 Million+
  • Revolving Lines of Credit
  • Term Loans
  • Capital Expenditure Lines of Credit
  • Dedicated Syndication Capabilities for Larger Transactions

Frequently Asked Questions

Get the Answers you Need to Common Questions About Asset Based Lending. Everything you need to know about Asset Based Lending and How your Business can Qualify.

What is asset-based lending?
Asset-based loans are secured by company assets such as eligible accounts receivable, inventory, real estate or equipment. Asset-based lending is a viable source of capital for businesses unable to qualify for traditional bank financing.
How does asset-based lending differ from traditional bank financing?

Asset-based lending analyzes the quality and performance of the underlying collateral and then considers the borrower’s financial condition, ownership/management, and overall business circumstances. Traditional bank financing is based on anticipated cash flow and often requires more stringent financial requirements and loan covenants from the borrower.

How can asset-based loans be used?
Our asset-based lending solutions are used by companies that are experiencing rapid growth, high leverage, turnaround or bankruptcy, operating losses (pre-profit), minimal or deficit net worth, tax problems or a blemished credit history. Asset-based loans can be earmarked for working capital, to fund a merger and acquisition, to address debt consolidation and many other financial situations.
Why choose Happy Financial Group over other lenders?

Since 1996, we have served businesses as a trustworthy asset-based lender led by knowledgeable, approachable founders/owners and professionals who make all decisions locally. With a history of more than 400 transactions, we find the asset-based lending solution that fits each situation perfectly. High-growth, turnaround and pre-profit companies all seek our expertise:

 

  1. We provide attentive service and respond to all new referrals within 24 hours
  2.  All borrowers meet with Access Business Finance’s founders/owners
  3. We deliver quick approvals and personal attention to your financial situation
  4. We promptly notify referral sources about the results of referrals, and our referral partners benefit from our referral fee program
How does ABL work?

Funding is advanced based on the value of the assets presented as collateral. Since an asset-based loan relies on the quality of the collateral and the borrower’s operating performance, funding is generally quicker than with traditional loans – often same day. To get started, contact our cash flow specialist or request that we call you here. We will contact you within 24 hours.

How is ABL priced?
Pricing is based on either prime rate or LIBOR (London International Bank Offer Rate), depending on the borrower’s operating cycle.
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 relative fast business funding for a merger or period of growth, who are undertaking a buyout, or even for companies facing bankruptcy.
What are the 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 an Asset Based Loan agreement?
A typical loan agreement with an asset based lender provides protections, rights, and remedies for both parties. It also establishes guidelines on how the Asset Based Loan is to be administered and how expectations are to be met. In addition, the Asset Based Loan agreement may include a limited number of restrictive and/or financial covenants, but these are typically fewer than conventional commercial loan agreements.
How do you qualify for asset-based lending?
Lenders have certain terms that an asset must meet before it can be used as collateral for a loan or line of credit. For an asset to qualify, it has to be of high value, low depreciation rate or high appreciation rate, and easily convertible into cash