What Is Asset-Based Lending?

Understanding Asset-Based Lending

Asset-based lending (ABL) is a type of business financing where a company's assets are used as collateral to secure a loan. These assets typically include accounts receivable, inventory, equipment, or real estate. Unlike traditional loans that focus primarily on cash flow and credit history, ABL looks at the value and quality of your assets.

Key Features of Asset-Based Lending

• Secured against business assets
• Typically offers higher borrowing limits than unsecured loans
• More flexible than traditional bank loans
• Can be structured as a revolving credit facility
• Often available to businesses with less-than-perfect credit

Common Types of Collateral

• Accounts Receivable
• Inventory
• Equipment and Machinery
• Real Estate
• Intellectual Property (in some cases)