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Need Cash Flow Solutions For Your Business?

Have you considered Asset-based lending (ABL) by using as collateral your company's liquid assets?

 

Who uses asset based loans?

 

Asset based loans are used by companies that need working capital to operate or grow. This type of facility helps companies manage the rapid growth issues and positions the company for growth.

 

What assets can be used as collateral?

 

The main collateral for an asset based loan is usually your accounts receivable. However, other collateral such as inventory, equipment, real estate, and other assets can also be used.

 

What is the borrowing base? How is it determined?

 

The borrowing base is determined as a percentage of the value of the collateral that has been pledged. Generally, companies can borrow 75% – 85% of the value of their accounts receivable. The borrowing base of inventory and equipment is often 50% or less.

 

How does the due diligence process work?

 

Before offering a loan, Consulta + needs to complete the due diligence process. During this process, Consulta + calculate the value of the collateral being offered, determine if there are any encumbrances on the collateral, and inspect the accounting books.

ADVANTAGES

 

  • More diverse funding methods: expeditious fund-raising

  • Provides a way of shifting the balance of debt

  • Sale of surplus inventories (by raising the quality of its existing inventories, a company can aim for higher profitability)

  • Strengthens and enhances internal control systems

 

 

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