We take a look at the growth of the Asset based lending (ABL) market, and how this form of lending is increasingly being used to provide finance for asset rich companies.
At a glance:
- Asset based lending (ABL) provides the borrower with a revolving credit facility secured against its balance sheet assets including both working capital and tangible fixed assets.
- Since 2006, we have seen the Asset Based Lending (ABL) market grow by 33%.
- ABL is particularly suited to finance asset rich companies facing a transaction, significant investment or volatile funding requirements.
- It is also a useful tool in restructuring situations where cash generation may be limited, but the balance sheet and asset base are relatively flat. In this scenario, it can provide a stable funding package for the business whilst it focuses on cost reduction, efficiency and operational improvements.
- We are increasingly seeing ABL being deployed as part of wider package alongside senior lending, mezzanine loans and trade finance.