What is asset-based lending?
A revolving line of credit, often paired with term loans, secured by your business assets: accounts receivable, chattel paper, inventory, machinery and equipment, and real estate. Availability is set by a borrowing base that moves with those assets.
How is ABL different from a bank line?
Banks lend mainly on cash flow and covenants. Asset-based lenders lend on collateral, so they can fund companies with losses, uneven earnings, fast growth or a leveraged balance sheet.
What advance rates are typical?
Commonly up to 80–90% of eligible receivables, up to 50–65% of inventory at net orderly liquidation value, and up to 75–85% of equipment at orderly liquidation value, set facility by facility.
How fast can an ABL close?
Typically 3–6 weeks from term sheet, including field exam and appraisals; non-bank lenders often move faster than banks.
What reporting is required?
Usually a monthly or weekly borrowing base certificate with A/R and A/P agings and inventory reports, plus periodic field exams.
Can a company with losses qualify?
Yes. Asset-based lenders focus on collateral quality and a credible plan, which is why ABL is common in turnarounds.
