Asset Based Lending
A credit line that grows with your balance sheet.
Asset based lending provides a revolving line of credit secured by the assets on your balance sheet, most often accounts receivable and inventory. Availability is calculated against a borrowing base, so the capital available to you moves with the collateral that supports it.
How it works
Asset Based Lending, step by step.
Collateral review
We review your receivables, inventory and other assets that may support the line.
Borrowing base
Eligible collateral is valued to establish how much you can draw.
Draw as needed
Request advances against available capacity through your account.
Report and certify
Share periodic collateral reporting so availability stays current.
Repay and redraw
Collections reduce the balance, and capacity becomes available again.
Is it a fit?
Well suited when
- You carry meaningful receivables, inventory or both.
- Your working capital needs swing with seasons or large contracts.
- You are financing growth, an acquisition or a transition.
- Your collateral supports more capital than a cash flow based loan.
Transparency
What to understand
- Availability moves with collateral
- Your borrowing base changes as receivables are created and collected and as inventory turns.
- Reporting keeps the line working
- Regular borrowing base reporting is part of every asset based facility. Your account is built to make that reporting straightforward.
- Terms are set in your agreement
- Advance rates, pricing, covenants and reporting requirements are defined in your credit agreement.
Industries
Where asset based lending works well.
- Manufacturing Producers and fabricators with receivables, inventory and equipment. Explore
- Wholesale & Distribution Distributors, importers and wholesalers of finished goods. Explore
- Healthcare Medical practices, home health, laboratories, suppliers and healthcare staffing. Explore
- Staffing Commercial, professional, light industrial and healthcare staffing firms. Explore
Questions
Common questions
How is asset based lending different from factoring?
Factoring is the sale of specific invoices. Asset based lending is a revolving loan secured by a pool of collateral, with availability measured by a borrowing base.
What is a borrowing base?
The value of your eligible collateral after advance rates are applied. It determines the maximum amount you can draw at any time.
Can inventory support the line?
Inventory can be included in a borrowing base, subject to review of its type, condition and marketability.
Read: Factoring, asset based lending or purchase order financing?
Put your receivables to work.
Start with a secure digital application. We will review your business and talk through the structure that fits.