Asset Based Lending
Unlock Your Potential
At Funding Solutions we specialise in helping businesses raise money against their assets. An excellent way of doing this is by using Asset Based Lending also known as ABL. It can help you leverage more money against the assets of your business than traditional forms of finance can generate. Our expertise can help you achieve your goals.
What Is ABL?
Asset Based Lending (ABL) can help you to grow your business by unlocking cash tied up in your assets.
You can increase your working capital by raising funds using your existing assets as security.
Asset Based Lending typically comprises of an Invoice Discounting facility alongside further funding secured against a range of existing assets. Additional funding can be generated from cash flow lending.
Suitable assets include:
DEBTORS
STOCK
PLANT AND MACHINERY
PROPERTY
Why Use ABL?
GROWTH
Increasingly businesses are using ABL to support their growth ambitions by maximising cash availability to help them secure new contracts, recruit or invest.
REFINANCE
As an alternative to traditional funding, ABL releases cash from the balance sheet today, offering greater working capital.
RESTRUCTURE
ABL offers the flexibility to complete corporate restructuring deals, potentially offering greater equity options for shareholders.
MERGERS AND ACQUISITIONS
ABL is widely used to support this market, providing senior debt secured against assets including those in the business being acquired.
MANAGEMENT BUYOUTS
A popular exit option, that allows management teams to acquire their business whilst providing on-going working capital support.
The Benefits Of ABL
- Asset Based Lending allows you to raise from £500k – £50m with up to:
- Protects equity – by leveraging assets more effectively, ABL offers the ability to raise significant funds without sacrificing equity.
- Price – compares favourably to traditional funding methods, whilst releasing significantly more capital.
- Cost effective – improve your working capital and turn your assets into cash to support your plans.
- Scalable – your available finance grows in line with your business. It can be used as part of a wider funding package for growth.
- Flexible – manage cashflow fluctuations and respond to your business needs.
- Diverse – raise funding on assets not typically allowed as security on a classic loan.
How Much Can I Raise?
Asset based lending is made up of a mixture of revolving facilities and fixed term loans. You can also access top up funding should additional funding be required.
Revolving facilities operate similar to an overdraft facility and fluctuate month to month. Fixed term loans reduce over an agreed period of time and typically attract a monthly capital and interest repayment.
The following table shows what prepayments can be generated against different asset classes and whether the facility is a revolving facility or a fixed term facility.
Top Up Funding
Beyond the asset classes listed above, additional funding can also be provided. This can be done via:
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Cash Flow Loans and Unsecured Loans
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Enterprise Finance Guarantee Loans – these EFG loans are government backed.
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Trade Finance can be used to pay suppliers
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Purchase Finance or Supplier Finance can also be used to make supplier payments
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