March, 2023
A contract development and manufacturing organization (CDMO) makes products to other healthcare companies’ specifications. Its receivables are owed by those clients, and its inventory often includes materials bought for a specific order.
In setting a borrowing base for a CDMO, a lender looks at how concentrated the receivables are among a few clients and whether inventory made for one client could be sold to another. Both affect how much of the collateral is eligible for an asset-based revolver.
About Great Elm Commercial Finance
Great Elm Commercial Finance (“Great Elm”) provides asset-based lending facilities to a wide gamut of middle-market businesses – serving as a one-stop shop for entrepreneurs, private equity firms, investment banks, and turnaround managers who need capital in tandem with speed and certainty. Our goal is to enable our financing partners to execute and deliver on their plans with industry leading, transparent commercial lending.
