Asset-Based Lending for small business.
Asset-based lending is a revolving credit facility secured by your balance sheet, primarily accounts receivable and inventory. Your borrowing limit moves with the collateral, so the line grows as the business does.
How asset-based lending works
You apply with an accounts receivable aging report, inventory detail, and recent financial statements. A field exam verifies the collateral, and underwriting sets advance rates against eligible receivables and inventory. Your available credit is governed by a borrowing base you report on a set schedule. As you invoice and build inventory the line expands, and as receivables are collected availability replenishes.
How asset-based lending is structured
Your offer document includes the full cost in dollars, the rate, the total payback, and the payment schedule, all in writing, before you sign.
To apply
- At least 2 years in business
- Significant B2B accounts receivable, inventory, or both
- Most recent accounts receivable aging report
- Inventory detail and recent financial statements
- Creditworthy commercial customers
Who asset-based lending fits
Asset-based lending fits established manufacturers, wholesalers, distributors, and staffing firms with substantial receivables or inventory and cash tied up in the operating cycle. Because availability scales with the balance sheet, it suits operators in growth, turnaround, or acquisition, and it is often the structure private equity sponsors and family offices expect for their portfolio companies.