Asset-Based Lending

Transaction Size: Revolving lines of credit typically range from $500,000 – $30,000,000

Asset-based loans (ABL) provide businesses with working capital, buyout and recapitalization/restructuring financing services for paying operating expenses, funding inventory and purchasing capital expenditures. An asset-based loan is structured as a formulaic, revolving line of credit without a scheduled repayment. The business is typically advanced between 70% -90% of the company’s eligible accounts receivable (generally include those accounts that are 90 days within terms) and up to 50% of the eligible inventory. (usually classified as either raw materials, or finished goods).

Ultegra can custom tailor an asset-based loan for your business needs. Asset-based loans can be underwritten quickly with minimal paperwork when compared to traditional bank funding. The companies that typically qualify for an asset-based loan are manufacturing, wholesale, distribution companies that generate accounts receivable. Generally, yearly sales must exceed $2 million.

How does Asset Based Lending Work?

Creditors provide your business with a revolving line of credit that is based on a formula of each qualifying asset classes. You may draw on the line of credit as needed. You only pay interest on the funds you’ve drawn down making it less expensive than a term loan.