Asset Based L
ending (ABL) is a way for established businesses to finance rapid growth, restructure their finances or fund an acquisition by using assets such as invoices, inventory, equipment, machinery, or commercial property as security.
Typically, an Asset Based Lending package is a structured combination of invoice finance and a term loan — for example, invoice discounting alongside a business loan secured against other business assets. This type of facility allows the business to maximise cash availability.
If you’re looking for a way to fund your business, you might be able to find it in your balance sheet — where cash is tied up in various assets. Asset Based Lending allows you to release this cash to fund an acquisition or simply accelerate day-to-day cash flow for example. ABL uses your sales ledger and physical assets such as machinery, stock, and property. It’s suitable for larger businesses and corporates, and gives you the funds necessary for both cashflow stability and longer-term growth.
Benefits of Asset Based Lending
- Can be more flexible than loans or overdrafts
- Funding secured against the value of your assets
- Use the finance for a wide range of business purposes
- Debtor protection available, to safeguard against bad debts
- Facilities grow with the business
- Reduces administrative burden of separate finance facilities