Asset-Based Lending: Unlocking Growth Through Your Assets

What Is Asset-Based Lending?

Asset-Based Lending (ABL) is a financing solution where businesses use their assets as collateral to secure loans. Assets such as accounts receivable, inventory, equipment, or real estate are leveraged to obtain working capital. This flexible funding method is ideal for businesses needing cash flow to grow, manage operations, or navigate financial challenges.

How Asset-Based Lending Works?

Asset Based Lending

In Asset-Based Lending, lenders assess the value of the borrower’s assets to determine the eligibility for loans. A percentage of the appraised value of the asset is the loan amount, usually ranging between 50% and 85%. For instance, accounts receivable can secure around up to 85% of their value, while inventory or equipment may secure less.

The loan size varies with the performance of the asset, making it a dynamic funding option. Businesses pay back the loan as they liquidate assets, such as receivables, into cash.  The cycle involves: 

  1. Asset evaluation and appraisal
  2. Determination of a borrowing base from the asset value
  3. Periodic tracking of the collateralized assets

ABL ensures that funds are available for a business when it needs it, often sooner than other traditional loans, supporting businesses during growth phases or seasonal cycles.

Considerations for Asset-Based Lending

Although Asset-Based Lending offers considerable flexibility, there are some issues that a business has to consider:

  • Asset Dependence: The loan amount directly depends on the values of the assets, which can change.
  • Costs: The interest rates and fees might be more than those charged for traditional loans.
  • Monitoring: Ongoing monitoring is a norm, where lenders require periodic asset audits to ensure the collateral is still sufficient.

Asset-based lending is a very practical solution for businesses looking for liquidity without giving up equity. By using existing assets, companies can enhance cash flow, seize opportunities, and drive growth effectively.

Asset-Based Lending with Avon River Ventures: How Avon River Is Different Than Others

Avon River Ventures (ARV) provides customized asset-based lending solutions supported by over 80 years of combined experience. We specialize in the raising of finance against different types of assets, such as inventory, machinery, accounts receivable, real estate, cash deposits, and intangible assets like patents, trademarks, and trade secrets. Our streamlined process-from due diligence to funding and ongoing service-assures quick access to capital for business growth.

We offer significant credit availability through customized loan arrangements tailored to your business needs. Avon River Ventures’ Asset-Based Lending is dedicated to providing your company with the best overall financing solution, including limited or no financial covenants and the ability to commit to, fully underwrite, and syndicate large transactions. ARV offers flexible financing with limited or no financial covenants and the ability to underwrite and syndicate large transactions. 

Generally speaking, Avon River Ventures provides advance rates on the collateral up to:

  • Accounts Receivable: Up to 90%
  • Real Estate (FMV): Up to 85%
  • Machinery/Equipment: Up to 90%
  • Inventory: Up to 90%
  • Intellectual Property: 100% up

Qualifications:

  • Over 2 years in operation
  • More than $100,000 in annual revenue
  • The company is registered in the U.S. or Canada

Trust ARV for effective, tailored asset-based financing to help drive your business forward.

Account Receivable: up to90%
On FMV of Real Estate: up to85%
Appraised Value of Machinery and Equipment: up to90%
Inventory: up to90%
On Appraised Intellectual Property: Up to100%

Eligibility

  • At Least two years in business
  • Minimum annual revenue of $100,000
  • Must be a locally registered company in the United States or Canada

Benefits

  • More Flexibility than a traditional credit facility
  • Advances available up to 90% on the assets secured
  • Global Financing Structures Available
  • Quick Access to growth capital
  • Committed Facilities with terms up to 120 months
  • USD and CAD-denominated terms
  • Fast closing within 2-6 weeks
  • For Private and Public Companies

Process

  • Connect with us
  • Submit the documents
  • We will underwrite
  • Asset Appraisal (if required)
  • Review and Accept the Term Sheet
  • Disbursement

FAQs

Is Asset-based lending only for large companies?

No! ABL is beneficial to businesses of any size if they qualify for eligibility, such as proven track record and minimum revenue.

How does Asset-based lending work?

Lenders calculate the value of your assets and advance loans based on a percentage of their worth. The loan changes as your asset values change.

Why go for Asset-Based Lending?

ABL provides faster access to funds, flexible terms, and higher borrowing potential than traditional loans—ideal for businesses that need liquidity.

Is Asset-Based Lending a short-term or long-term solution?

ABL often serves as a short-term solution, bridging a cash flow gap or supporting the growth of a business.

What are the risks associated with Asset-Based Lending?

The risks of Asset-Based Lending are that the creditor may seize the collateral if the business fails to pay off the loan.

Structured Financing


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(For Canada)
+1 (647) 609-9086

(For USA)
+1 (424) 338-5756

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