• 805-217-9896
  • sales@firstusfinance.com
Online Application Online Application
First US FinanceFirst US FinanceFirst US FinanceFirst US Finance
  • Home
  • About Us
  • Forms
  • Products
    • Working Capital Loans
    • Capital Finance
    • Operating Lease
    • Power Purchase Agreement (PPA)
    • Aircraft Finance
    • Improved Vendor Program
  • Finance Questions
  • Partner Links
  • Vendor Program
  • Contact
  • Finance Blog
  • Home
  • About Us
  • Forms
  • Products
    • Working Capital Loans
    • Capital Finance
    • Operating Lease
    • Power Purchase Agreement (PPA)
    • Aircraft Finance
    • Improved Vendor Program
  • Finance Questions
  • Partner Links
  • Vendor Program
  • Contact
  • Finance Blog

Asset Based Lending – The Basics

  • Home
  • Equipment Financing
  • Asset Based Lending – The Basics
An Operating Lease Could be for YOU
November 12, 2013
The Key to Success: Access to Capital
February 10, 2014
December 19, 2013
Categories
  • Equipment Financing
Tags
  • accounts receivable factoring
  • business equipment financing
  • business equipment loans
  • business finance
  • commercial lending
  • commercial loans
  • equipment lease
  • equipment leasing
  • equipment leasing companies
  • leasing companies
  • project finance
  • solar financing

Asset Based Lenders (“ABL Lenders”) look to tangible collateral to support their loans.  They are more flexible on cash flow and capital than traditional bank loans and will accept some losses and higher leverage than a bank. Higher rate (non-bank) ABL lenders can even overlook some (but not all) character flaws. ABL lenders primary focus is lending against Accounts Receivable, Inventory and Equipment; some will take real estate as additional security.

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.

Some ABL Lenders monitor tightly like a factor while others only require a monthly borrowing base. Rates can vary from just 1% above a bank to 2-3% per month for inventory only lenders. Many smaller ABL lenders are independent however most of the larger ones are bank owned.

The bank-owned ABL Lenders have lower rates but more stringent lending criteria. Some smaller and independent ABL lenders may go as high as 90% advance on Accounts Receivable while bank-owned ABL Lenders are more likely at 80%.  Inventory and Equipment loans have an advance rate of generally 50%-80% of the Orderly Liquidation Value of the collateral as determined by an appraisal of the collateral by a qualified Inventory and Equipment appraiser

asset based lending, bank loans, equipment financing, equipment leasing

Share

Related posts

February 28, 2023

An Alliance with other Companies


Read more
January 17, 2023

Lost in the Shuffle


Read more
December 31, 2022

2022 – A Year of Change


Read more

Comments are closed.

Sign-up for Email

CA Finance Lenders Lic.
#60DBO-50969

Email: Sales@FirstUSFinance.com
Direct Line: 805-217-9896


Member of:
member logo

  • Working Capital Loans
  • Capital Leases
  • Operating Leases
  • Power Purchase Agreement (PPA)
  • Aircraft Finance
  • Improved Vendor Program
  • Finance Blog
  • Forms
  • Products
  • Business Finance Questions
  • Improved Vendor Program
  • Sitemap
© 2018 First Us Finance. All Rights Reserved | Designed and Developed by AAPNA Infotech