ABL Secured Term Loans provide businesses with structured, asset-backed capital to support growth, fund major initiatives, or stabilize operations. By using receivables, inventory, equipment, or real estate as collateral, companies can access reliable financing without relying solely on cash flow or credit strength. This type of lending is particularly effective for organizations with significant physical or financial assets seeking long-term funding solutions.
What is an ABL Secured Term Loan?
ABL Secured Term Loans are financing solutions where the loan amount is determined based on the appraised value of your company's assets. Unlike traditional loans that may focus heavily on cash flow or credit history, these loans prioritize the tangible value of your assets, providing a pathway to funding even when conventional financing avenues are limited.
ABL term loans can provide up to 85% of your eligible accounts receivable—enhancing liquidity without equity dilution.
What types of assets qualify as collateral?
Accounts Receivable
Inventory
Machinery
Equipment
Commercial Real Estate
Debtor In Possession
When is an ABL Term Loan the Right Fit?
ABL loans offer immediate liquidity to stabilize operations during leadership changes, restructurings, or shifts in business strategy—without requiring strong recent financial performance.
When revenue is expanding quickly but cash flow hasn't caught up, an ABL term loan can unlock working capital from assets like receivables and inventory to keep operations moving forward.
Companies with strong assets but low or negative equity often face challenges with traditional loans. ABL lending focuses on asset value, not equity ratios, making funding accessible even in these scenarios.
ABL term loans can replace legacy debt, provide liquidity during reorganizations, or refinance maturing credit lines with greater flexibility and fewer restrictions.
If your current lender is exiting the relationship—or if you're seeking more responsive support—ABL financing offers a seamless transition backed by your existing assets.
Frequently Asked Questions
Interest rates are influenced by several factors, including the quality and type of collateral, your company’s financial profile, and market conditions. ABL loans often carry more favorable rates than unsecured debt due to the secured nature of the financing.
LTV ratios vary based on asset type. Accounts receivable may be advanced up to 85%, inventory up to 50–65%, equipment around 75% of appraised value, and real estate up to 75% of market value.
If collateral value drops significantly, your borrowing base may be adjusted downward, which could require partial loan repayment or additional collateral to maintain the agreed terms.
Yes. ABL term loans can be structured alongside revolving credit lines, mezzanine financing, or even unitranche loans, depending on your capital structure and strategic goals.
ABL Secured Term Loans typically range from 3 to 7 years. Terms can vary based on collateral type, borrower needs, and the structure of the deal.
Startups may qualify if they have sufficient eligible assets and experienced leadership. Our underwriting process evaluates both asset strength and business viability.
Ongoing reporting is typically required, including monthly borrowing base certificates, collateral reports, and periodic field exams to ensure loan-to-value compliance and portfolio health.
ABL lending is ideal for asset-heavy industries such as manufacturing, distribution, healthcare, transportation, staffing, and others with substantial receivables or inventory on hand.
It can. ABL financing often replaces or restructures existing facilities. Coordination with your current lenders is critical to avoid conflicts or breaches of existing covenants.
Upfront costs may include legal documentation fees, due diligence, appraisals, and underwriting charges. These are discussed transparently during the proposal stage.