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Asset Based Lending

  • For growing businesses, this is a very attractive way to fund expansion. It is flexible and agile in nature, as the funding line is linked to a company’s assets, growing as they do. Also, access to funding is quicker and there is no need to reapply should you require further funding if your requirement grows.

What Is An ABL Facility?

Asset Based Lending facilities are used to provide working capital to businesses. Having access to sufficient working capital is vital for businesses operating in a recovering or growing economy. The correct financing structure is pivotal to a business’ success. It ensures a business has the cash needed to grow, adapt, make acquisitions, or to simply help to manage day-to-day trading requirements.

With asset-based lending facilities, cash is released from the receivable and stock element on the balance sheet. This gives business access to additional amounts of working capital and allows the value of these assets to be reinvested back into the company.

Benefits Of An ABL Facility

Increased working capital

It is an efficient means to gain access to more working capital when you need it, without having to slow growth or raise cash through equity sale.

Enable growth

Freeing up capital tied up in your assets provides additional cash to fund organic growth or the means to acquire competitors.

Business restructuring

An asset-based facility provides the cash to fund management buyouts or to simply refinance traditional bank lending, which can be more covenant restrictive or expensive.

Flexible

The funding line will grow in line with the growth of your assets and negate the need to continually re-apply for finance, which can slow growth and result in missed opportunities.

Support

It can even out cash flow through seasonal or market fluctuations and enable a business to upgrade technology, invests in new plant and buy the stock before to payments being received.

Confidence

It provides ready access to funds and empowers businesses to make fast buying decisions and act on growth opportunities.

ABL Funding Options

Asset Based Lending facilities were previously reserved for large corporate entities. But with the growth in the sector more and more firms are extending these facilities to SME sized businesses.

They work by trying to unlock the value of the balance sheet to provide cash and there are many different ways this can be achieved:

  • Receivables owed to a business
  • Inventory or stock held by a company
  • Plant and machinery owned by the company
  • Property owned by the company
  • Additional cash flow loans
  • EFG top-up funding

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How Oakmead Finance Can Help

Our team of Asset-Based Lending specialists have years of experience within the asset-based lending sector. Because of this, we are best placed to advise and arrange facilities through a network of traditional and specialist lenders within the industry.

Contact us to discuss your requirements, explore the Asset-Based Lending options available to you or have us review your existing finance facility.

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