Working capital needs change as your business grows. Asset-Based Lending provides access to capital backed by your accounts receivable, inventory, equipment, and other business assets. At Accord Financial, we take the time to understand how your business operates so we can structure a facility that supports your goals today while giving you the flexibility to adapt as your business evolves.
ASSET-BASED LENDING SUPPORTS WORKING CAPITAL NEEDS
To assess an Asset-Based Lending facility, the following information is typically required:
- Completed application
- Latest accounts receivable (AR) and accounts payable (AP) aging reports
- Interim financial statements and the most recent reviewed or audited year-end financial statements, including notes
- Latest GST, HST, PST, and DAS filings, including proof of payment
- Sample documentation for the three largest customers, including purchase orders or vendor agreements, invoices, and proof of delivery
- Accounts receivable insurance policy and current approvals, if applicable
Additional Requirements for Asset-Based Lending Facilities
- Monthly financial projections, including income statement, balance sheet, and cash flow forecast
- Shareholder biography and business plan
- Personal financial statements
Financing support may be available for existing Accord clients as their business needs evolve over time.
Availability is determined on a case-by-case basis and subject to review by the Accord team.
Whether you are an existing client or exploring Accord for the first time, our team would be pleased to discuss your business needs and the financing solutions that may be available to support your goals.
Asset-Based Lending unlocks working capital from eligible business assets, helping improve cash flow while preserving financial flexibility. Your borrowing capacity is based on the value of assets such as accounts receivable and inventory, so it can increase as your business grows. This gives your business continued access to working capital that can support changing operational needs and future growth.
To assess an Asset-Based Lending facility, the following information is typically required:
- Completed application
- Latest accounts receivable (AR) and accounts payable (AP) aging reports
- Interim financial statements and the most recent reviewed or audited year-end financial statements, including notes
- Latest GST, HST, PST, and DAS filings, including proof of payment
- Sample documentation for the three largest customers, including purchase orders or vendor agreements, invoices, and proof of delivery
- Accounts receivable insurance policy and current approvals, if applicable
Additional Requirements for Asset-Based Lending Facilities
- Monthly financial projections, including income statement, balance sheet, and cash flow forecast
- Shareholder biography and business plan
- Personal financial statements
Financing support may be available for existing Accord clients as their business needs evolve over time.
Availability is determined on a case-by-case basis and subject to review by the Accord team.
Whether you are an existing client or exploring Accord for the first time, our team would be pleased to discuss your business needs and the financing solutions that may be available to support your goals.
Asset-Based Lending unlocks working capital from eligible business assets, helping improve cash flow while preserving financial flexibility. Your borrowing capacity is based on the value of assets such as accounts receivable and inventory, so it can increase as your business grows. This gives your business continued access to working capital that can support changing operational needs and future growth.
Frequently Asked Questions
Asset-based lending is a type of business loan backed by collateral (financial or physical assets) such as accounts receivable, deposit accounts, inventory, machinery, equipment or real estate. In contrast to unsecured loans, such as a personal loan, secured loans, like ABL financing or home equity financing, provide borrowers access to larger capital flows and higher maximum loan amounts.
Asset-based loans, a revolving line of credit, and a secured credit card can all be secured by multiple forms of collateral. Your borrowing capacity is based on a percentage of the value of your assets, which is determined by the lender usually working in conjunction with an appraiser. In exchange for the loan, a security interest in your collateral is given to the lender so they may recoup some or all of the loaned funds if you, the borrower, defaults.
Asset-based loans can be secured with assets, such as accounts receivable, inventory, machinery, equipment and real estate, or even liquid assets, like cash and certificates of deposit. Asset-based loans offer flexible structure configurations since lenders can customize the terms based on the asset class used as collateral and the borrower’s unique credit profile.
The exact asset that can be used is unique to each loan and may vary depending on the lender’s guidelines and the industry in which the borrower operates. It is important to note that all assets used as collateral must have a valid title and be easily liquidated in the event of default. When properly leveraged, asset-based loans offer an efficient source of financing and can help propel business growth.
Asset-based loans enable your business to leverage its assets in order to obtain loan amounts that can finance growth, acquisitions, restructurings and turnarounds that will increase your company’s cash flow. In contrast to an unsecured loan, asset-based financing is not constrained by financial ratios or covenants based on credit score or credit history, so you can typically borrow more through ABL lending than traditional personal loans or credit lines, even if you have a strong credit report.
During due diligence, asset-based lenders will work with you to study your needs and your business plan, and, in particular, take a deeper look at the specific assets that you want to leverage in order to access additional working capital.
The rates on asset-based loans vary greatly from one transaction to the next. Typically, asset-based lending rates are based on the type of asset available as collateral, the level of risk and the financial performance of your business.
Factoring, also known as accounts receivable financing, is an advance on a business’ outstanding invoices (usually <90 days old). Therefore, factoring is technically a type of asset-based financing, where the business’ receivables act as the asset to secure funding from the lender. Many factoring companies will provide accounts receivable financing, but will not offer financing on other assets such as inventory or equipment.