ASSET BASED LENDING
What is Asset Based Lending
- A loan generally secured by accounts receivable inventory, equipment, and/or real estate
- Financing is governed by a borrowing base based on asset values
- Lenders are typically focused on liquidity and asset conversion to cash as primary source of repayment
- Structures include revolvers supported by working capital assets and term loans supported by fixed assets
Why Use Asset Based Loans?
- Limited and more flexible covenants, typically based on asset coverage and liquidity
- Leverage tolerance for asset-rich borrowers may be greater than you think
- ABL works well in combination with other junior financing alternatives (second lien, mezzanine, high yield)
- Efficient borrowing mechanics, which allow for paydown and reborrowing of funds when needed, thus limiting interest expense
Who Uses Asset Based Loans?
- Working-capital-intensive companies
- Financial sponsors looking for acquisitions
- High quality, asset-rich companies
- Seasonal or cyclical businesses
- Retail-based companies
- Companies undergoing turnarounds
- Private equity funds looking to assist their portfolio companies
Speak with a Cole Taylor Banker
Contact Michael Sharkey for more information.
Email:
msharkey@coletaylor.com
Or call 847-653-7775.
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We Close What We Propose
Our lenders are experts in the field of asset-based lending. We know how to get things done and will never propose anything we can’t deliver – so you won’t experience any surprises at closing.
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