What Is Asset Based Lending “ABL”?
Asset based lending is a type of financing in which the asset being bought, i.e. inventory, land or machine, is used as the collateral. In asset based lending, the quality of the collateral, and not the financial strength of the borrower, is of prime importance. GMA USA bases the amount of the loan on the value of the asset being financed, and the ease with which it could be sold off if the borrower defaults.
If your business is relatively new, or has recently experienced challenges, you might not have access to capital through traditionally structured loans. Many banks will not offer credit under these riskier circumstances. GMA USA will advance funds on eligible accounts receivable-up to 85% and eligible inventory-up to 60%. Higher advance rates are available based upon appraisal.
What kinds of business can benefit from ABL?
Asset based lending is a great fit for companies that have had an inconsistent financial performance as a result of the economy and are now beginning to recover, companies that are looking for high growth opportunities, startups, and companies that are doing mergers and acquisitions.
GMA USA, using asset based lending, can help finance startup companies that do not have profitability and sustainability that banks offering traditional lines of credit are looking for. It could also be the case that the business and its owner are not able to meet restrictive covenants that are typical of a general commercial loan and, therefore, do not qualify for a traditional loan.
To learn more if this type of financing is a fit for you and your company, continue reading What are the Benefits and What are the Uses of Asset Based Lending.
GMA USA will work hard for you to get you set up in as little as 3 business days. Get started immediately by filling out the quick application on the right-hand side of this page or go to our online or downloadable application.