Asset Based Lending

Also referred to as "commercial and industrial lending", this form of financing utilizes each component of a borrower’s collateral pool to its highest and best borrowing capacity. The current or “liquid assets” of the borrower have the best borrowing power, and warrant the highest advance rates. These liquid assets are the borrower’s accounts receivable and inventory. Next are the borrowers fixed assets, such as machinery, equipment and real estate. Each class of collateral is evaluated through our internal due diligence or third party appraisals. Ultimately, the lender will assigned an advance rate for that class of collateral that reflects the lender’s assessment of the risks involved. The sum of the advances from all of the classes equals the availability of working capital which the borrower can use to pay off existing debt, payables and growth.