Asset-Based Lending

Asset-Based Lending

An asset-based loan is structured as a formulaic, revolving line of credit without a scheduled repayment. The client is typically advanced 70-90 of the company’s eligible accounts receivable and up to 50% of the eligible inventory. Eligible receivables generally include those accounts which are 90 days within terms. Eligible inventory is usually classified as either raw materials, or finished goods.

Asset based loans (ABL) provide companies with working capital, buyout and recapitalization/restructuring financing services to businesses for paying operating expenses, funding inventory and purchasing capital expenditures.

Transaction Size: Revolving lines of credit typically range from $500,000 – $30,000,000

Criteria: Most companies qualifying for an asset-based loan will be in manufacturing, wholesale, distribution that generate accounts receivable. In most cases, yearly sales must exceed $2 million.

What is an Asset Based Loan?

A asset based loan provides businesses with immediate funds and ongoing cash flow based the company’s assets such as commercial accounts receivable, inventory, business equipment and machinery, and recurring revenue contracts.

How does Asset Based Lending provide working capital?

Creditors provide your business a revolving line of credit based on a formula of each of the qualifying asset classes. You may draw on your line of credit whenever needed and pay back to increase availability for future use. You only pay interest on the funds you’ve drawn down so overall, it’s less expensive than a term loan.

Why Asset Based Financing?

Culver Capital Advisors can custom tailor an asset based loan that fits your business needs. Asset based loans can be underwritten relatively quickly with minimal financial covenants when compared to traditional bank financing. Flexibility is a key component as your company only uses what is needed.

Who is using Asset Based Lines of Credit Facilities?

We can provide asset based lines of credit to growing small businesses, medium businesses and large enterprises. Businesses can tap into their assets for working capital to support growth and help fund through seasonal and cyclical periods.

Referral Partners:

Commercial Banks call on Culver Capital Advisors to assist in obtaining new financing for their portfolio clients that many have out grown the current credit facility or may have violated a financial covenant. CCA can quickly identify a solution that will keep the clients business growing without disruption to the operation.

CCA works closely with accounting firms to tailor financing solutions