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• 25 Mar

  Asset Based Lending Full utilisation of all a company's assets

  Asset Based Lending

  I come across numerous SME companies who have either overdrafts and/or Invoice Finance facilities yet they are still looking for additional working capital to assist in growth or upcoming projects. When speaking to them it becomes clear that in some cases they have company assets that are not being fully used or valued by their existing providers.

  Asset Based Lending (ABL) provides just such a facility whereby a company's assets such as their Stock, Sales Invoices or Plant and Machinery are valued separately and, depending on the industry sector, can provide substantially more available funds than through say a traditional facility such as an Overdraft or Loan.

  Also see: Stock Financing

  ABL Providers & Their Criteria

  In the same way as Factoring companies are experts in handling sales invoices and providing maximum value out of such an asset, ABL providers have the same expertise to maximise value out of stock and plant/machinery. Clearly, not all businesses are suitable for this type of product but companies in sectors such as Timber, Pharmaceuticals, Printing, Packaging, Steel, Food and Automotive could do well by reviewing their existing facilities, especially if they are handled via the more traditional banking facilities.

  Also, company size will be key but if you have a turnover of £2-3m+ and stock (ideally finished goods) with a value of over £600k and plant and machinery worth a minimum of £50k then this could be for you. Here at FundInvoice, we know of ABL providers that may be able to help and would be happy to introduce you to them. Just contact me through www.fundinvoice.co.uk and ask for Sean.

  By Sean Morrow