Asset Based Lending
This is the practice of using assets as pledged collateral for a substantial amount of working capital. Companies can replace an existing credit line with the monetization of physical assets; essentially leveraging an item not generating revenue for immediate access to capital. Securing traditional capital is not only becoming harder to obtain, the process has become long and drawn out. When a company is in need of working capital, many businesses are seeking alternative financing programs, making Asset Based Lending (ABL) more popular. Underwriters place emphasis on the value of assets, instead of personal credit and balance sheet contents. ABL offers a credit line that will be substantially higher than they would find elsewhere.