Despite the industry’s sometimes negative reputation, Asset Based Lending can be a preferred solution for borrowers who put in the effort to find the “right” lender, with appropriate collateral and loan structure. One topic that a borrower should discuss with the lender before entering into an Asset Based Lending agreement is the structure of the ABL facility – and the borrower’s management team needs to read all the paperwork. While traditional ABL is rather commoditized, some elements of the loan’s structure may be critical to the success of the partnership.

2. https://immfinancial.com
Welcome.
My name is Jack with IMMFinancial.com
and I am here today to discuss Asset-
Based Lending For 2017 And Beyond.

3. Despite the industry's sometimes
negative reputation, ABL can be a
preferred solution for borrowers
who put in the effort to find the
"right" lender, with appropriate
collateral and loan structure.

4. The primary difference
between asset-based
lending and commercial
bank financing is what the
lender looks to first for
repayment of a loan.
An asset-based lender looks to collateral.
COLLATERAL

5. The primary difference
between asset-based
lending and commercial
bank financing is what the
lender looks to first for
repayment of a loan.
Banks look for collateral and covenants.
COLLATERAL
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6. As access to capital had become
increasingly restricted for middle-market
companies, many businesses seeking
liquidity have begun to see alternative
financing solutions, like those offered by
online asset-based lenders.

7. Pre 2010 there was
little innovation in ABL

8. Pre 2010 there was
little innovation in ABL
Banks continued to offer formulaic,
cookie-cutter products that did not
accommodate companies with unusual
characteristics, seasonal attributes, or
atypical business cycles.

9. Asset-based lenders
became known as
"lenders of last resort."
The industry was often associated with
failing companies and bankruptcy.

10. Asset-based loans can be a
much-needed source of capital
for companies that are rapidly
growing, highly leveraged, in
the midst of a turnaround or
undercapitalized.
Sometimes a company simply needs that
infusion of cash to get over a financial
hump or prevent growth from stalling
out.

11. Lenders who provide asset-
based credit facilities will work
closely with the borrower,
working and monitoring the
collateral with the client when
challenges arise.
Clients of asset-based lenders and factors
will frequently attest to the flexibility
offered by their lenders.

12. ABL provides liquidity to both
distressed companies
undergoing a turnaround
process and growing
companies looking to expand.
It's more expensive than traditional
borrowing, but generally an ABL
arrangement gives the borrower access
to the lender's expertise.

13. A vast majority of those same
small business leaders, nearly
80%, indicated that one of the
biggest impediments they face
in creating new jobs is lack of
access to capital.
One sector of the financial services
industry that did not restrict the flow of
capital to businesses during the
downturn, and continues to lend to
businesses today.

14. The chances of securing a credit line are only as
good as the quality of the receivables. Commercial
lenders will sort through your customers to
identify the ones that pay in less than 60 days or
have a strong credit rating.
They may not deem sales to individuals or
small businesses as "eligible receivables."

15. Asset-based lenders can often provide
more liquidity than traditional lenders
by using the value of the assets.
ABL lines can be tailored to meet a company's
specific needs, such as providing increased
seasonal advances to help the borrower
through a low selling season.

16. To determine a prospective lender's
approach to communication, a
borrower's management team needs
to spend as much time as possible with
the lender, ideally at its office.
They should understand the process by
which the lender makes decisions, and
should get to know as many of the
lender's decision-makers as they can.

17. One topic that a borrower should
discuss with the lender before entering
into an ABL agreement is the structure
of the ABL facility - and the borrower's
management team needs to read all
the paperwork.
While traditional ABL is rather
commoditized, some elements of the
loan's structure may be critical to the
success of the partnership.

18. Alternative lenders often have a different
approach toward covenants than do
traditional lenders, whose covenants are
primarily focused on the balance sheet
and financial performance.
While asset-based lenders may also
consider performance-based metrics,
they are much more concerned with
collateral and liquidity covenants.

19. Covenants are useful for driving
dialogue between borrower and lender,
but they shouldn't be the only driver.
At the end of the day, an asset-based lender
should focus on the borrower's collateral
and leading performance indicators rather
than on financial covenants that may be
restrictive or too rigid.

20. Along the same lines, the borrower's
management team must understand, before
entering an agreement, the degree to which
the lender is willing to work with them through
the flows and ebbs of their business cycle.
The purpose of any covenant should be to act as a
trigger so that when the borrower reaches a
certain point, management must take a "time
out" for a dialogue in which the lender can ask
key questions and determine next steps.

21. Often, the relevant comparison for the borrower
is not ABL lender versus traditional bank, but
rather ABL lender versus equity investor.
The borrower needs to pay close attention to
the service, flexibility, and responsiveness of
its prospective partners, as well as the access
borrowers have to decision-makers within the
lending organization.

22. An innovative, forward-thinking approach to the
lender-borrower relationship can complete the
value equation and make ABL's price worth paying.

23. https://immfinancial.com
Ready to take your company to the next
level using IMM Asset Based Lending, just
go to our website today to get started!

24. IMMFinancial.com, Business Financing to Suit Your Needs.