17 Jun 2024 / Asset Based Lending

What is Asset-Based Lending?

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Asset-based lending (ABL) is undoubtedly on the rise – with Yahoo Finance reporting that Asset-based finance is currently growing at an annual rate of 12.8%. Subsequently, this means that UK businesses are now receiving over £20 billion of lending from UK Finance members in Invoice Finance and Asset-based lending combined. Yet many SMEs remain unaware of what an ABL facility could do for their business and their funding requirements, or even the definition of the product itself.

Asset based or asset backed lending involves a business borrowing money, which is secured by the assets in its balance sheet, such as inventory (stock), accounts receivable (invoices), equipment (plant and machinery), or property. This form of lending allows businesses to obtain funds based on the value of their assets, often providing more flexible borrowing terms than traditional loans.

This multi-faceted approach creates a streamlined payout experience for SMEs, who can access all their funding needs from a trusted ABL lender, and it reduces the potential complications of dealing with multiple funders who all operate differently and within different timescales. For companies wishing to fund a merger, acquisition, or management buy-out/buy-in, this is ideal.

Why choose an asset-based loan?

  1. SMEs can unlock cashflow against assets in the business, which allows for immediate access to liquidity and enables the business to invest in day-to-day operations, staffing growth costs and acquisitions.
  2. The ‘one-stop-shop’ aspect of ABL means business owners only need to approach one asset-based lender to acquire the funding needed with one solution rather than multiple from various lenders. This massively decreases the stress and time required in researching and contacting different funders, as well as the administrative work, allowing business owners to focus on what really matters – their business.
  3. Asset-based lending offers a solution-focused approach, working with a team dedicated to tailoring a solution to attend to a business’s unique needs.

If you would like to learn more about asset-based lending solutions available with Time Finance, get in contact with our ABL team today: assetbasedlending@timefinance.com

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