Explore asset-based lending and revolving lines secured by eligible accounts receivable, inventory, equipment or other qualifying business assets.
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An asset-based revolving line of credit may give an established business access to working capital supported by eligible receivables, inventory, equipment or other business assets. Availability can rise or fall as the eligible asset base changes.
The provider may apply an agreed advance rate to eligible receivables, inventory or other approved assets. Ineligible, disputed, aged, concentrated, obsolete or previously pledged assets may be excluded. The resulting borrowing base can limit current availability even when the stated maximum line is higher.
Eligible business-to-business receivables may be assessed by customer quality, aging, disputes and concentration. Inventory may be reviewed for location, ownership, turnover, demand and liquidation value. Equipment may require identification, valuation, inspection, insurance and a review of existing liens.
Asset-based facilities may require regular borrowing-base certificates, receivables and inventory reports, field examinations, appraisals, deposit controls, insurance and covenant compliance. A business should understand the reporting burden and how quickly availability can change.
Review the advance rates, eligible-asset definitions, interest or finance charges, unused-line or monitoring fees, audits, appraisals, minimum commitments, collateral, guarantees, lockbox arrangements, covenants, term, default provisions and early termination costs.
Invoice factoring may be simpler when eligible receivables are the primary asset and the business wants invoices purchased individually. Equipment financing may better match one asset purchase. A conventional line or term loan may be preferable when the business qualifies without a borrowing-base structure.
Providers commonly apply advance rates to eligible assets and adjust availability through a borrowing base. Eligibility rules, reserves and concentrations can reduce availability.
Depending on the provider, eligible assets may include qualifying business-to-business receivables, inventory, equipment or another approved business asset. Not every asset or receivable qualifies.
No. Factoring generally involves selling eligible invoices, while an asset-based line is commonly a secured revolving credit facility governed by a borrowing base. Agreements and provider requirements vary.
Yes. Availability can increase or decrease as eligible assets, reserves, concentrations, borrowing-base reports and compliance change.
Useful records may include receivables and payable aging, inventory reports, financial statements, bank statements, current debt and lien information, equipment schedules, customer concentration and a clear use-of-funds plan.
