Leverage
Utilising more collateral will generate more cash which can be useful in a number of situations, an M&A transaction being one example.
the low down
Is an Asset Based Lending right for you?
Asset-based lending (ABL) is an invoice finance iteration that allows a business to borrow money, utilising its outstanding invoices (debtors) as collateral.
A business can typically borrow up to 90% of its outstanding invoices to fund its working capital cycle and grow more quickly.
The main difference between this facility and other forms of invoice finance is that it includes more than the debtors as collateral, such as inventory, plant and machinery, and property, to find a more leveraged solution for a business. This is often used in M&A transactions, where leveraging the business to its fullest can provide consideration for the transaction.
Almost always, the ABL facility is a mix of Confidential Invoice Discounting + the other assets. It lends itself to larger businesses and so it is almost never used in conjunction with a factoring facility.
At Sedulo Funding Solutions, we have access to the whole UK finance market and we make business finance easy.
Fancy booking a call (or meet-up) with our team of experts? We can get you a no-obligation quote.
Personal Security
Because the facility's collateral is the business assets, there is a much smaller reliance on personal guarantees. We would expect PGs to be set at approximately 10% of the facility limit as opposed to 100% in many other cases.
Scalable
Invoice finance supports business growth by providing additional working capital as debtors increase, making it an ideal solution for fast-growing companies.
Debtor protection
A key risk to any business that trades on credit terms in the insolvency risk of the debtor. Invoice Finance can provide bad debt protection which safeguards a business from it’s customers going into liquidation, owing them money.
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£150,000 for an insulation contracting company in just two days
The business needed working capital so they could make repairs to a van and begin a new and exciting project.
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Sam Wells
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Invoice Finance facility for multi-million turnover recruitment company
Following a change in banking facilities, the new provider could not assist to the required levels. Sedulo Funding Solutions structured a bespoke working capital solution for them.
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£150,000 Unsecured Business Loan for a renewable energy business
The business required working capital to facilitate a large contract.
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Our Answers To Your Questions
We’ve put together a list of common Business Loan FAQs. If there’s something you want to know and you can’t find the answer here, get in touch with our team of finance experts.
The amount you can borrow with ABL depends on the value of the assets you pledge as collateral. Lenders typically advance a percentage of the asset value, such as 70-90% of accounts receivable or 50-70% of inventory. The total available credit line can grow as the value of your assets increases.
ABL is typically more suitable for established businesses with significant assets. Start-ups may find it challenging to access ABL if they lack sufficient collateral. However, if a start-up has valuable equipment, inventory, or receivables, it might still qualify for ABL.
Industries that commonly use ABL include manufacturing, wholesale distribution, retail, logistics, and construction. These sectors often have substantial physical assets and require significant working capital to manage operations, making ABL a good solution.
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A Team Of Finance Experts, On Your Side
Whether you’re looking to obtain funding to take on the next stage of business growth or access working capital to cover costs, it’s important to have a team of experts on your side.
Our experienced funding team operates out of each city centre office in Manchester, Leeds, Liverpool, London and Birmingham. We’re available to meet face-to-face so that we can better understand your business and talk you through your funding options, or we can assist over the phone – whichever you’d prefer!
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