Asset Based Lending (ABL)

 

Asset based lending (ABL) enables larger businesses to raise higher levels of funding, ideal for MBO or MBI transactions and also for releasing additional working capital, for use in growth or turnaround profiles.

Assets that are typically leveraged with an ABL facility are:

  • Receivables
  • Stock
  • Property

Generally the receivables line is a pre-requisite and often is required to be more than 50% of the overall funding package to comply with the funders criteria.

ABL facilities can also have a cash flow term loan which provides additional cash to complete the MBO transaction or generate additional headroom.

Suitable businesses will have robust accounting and reporting systems and a strong management team.