Asset Based Lenders (“ABL Lenders”) look to tangible collateral to support their business loans. They are more flexible, regarding cash flow and other performance criteria, than traditional lenders and will accept some losses and higher debt leverage than a bank. ABL lenders primarily focus on lending against real estate, capital equipment, accounts receivable and inventory as standard security. The larger ones are bank owned and run as a separate division while the numerous smaller ones are privately owned but they all operate within similar principles.
There are many asset classes that banks shy away from for which there are specialized ABL lenders to meet these needs. Examples of these are term loans on used equipment that are generally not eligible for leases, revolving lines of credit on inventories or loans against foreign receivables.
The use of asset based financing to get new equipment into your facility is a good option when the business credit has taken some negative hits; in 2009 many companies found themselves in this position. If we cannot get you a good program through traditional equipment financing then, if you own certain assets, we can apply to get you approved with an ABL lender. This opens the door to more avenues to get the equipment you need and money for your next expansion project.