February, 2024
Food and beverage manufacturers often sell to grocery chains and distributors that take deductions for promotions, short shipments or spoiled product. When a lender sets the borrowing base, it reviews that deduction history, because deductions reduce how much of each invoice counts as eligible.
An asset-based line covers working capital against receivables and inventory, so the deduction review sets how much the line can provide. A term loan in the same facility handles longer-term needs on a separate repayment schedule.
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.
