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BBVA Compass

Asset Based Lending

Commercial finance that maximize flexibility

Asset based lending is an ideal solution for companies with capital-intensive balance sheets who are looking to maximize financing flexibility.

As specialists in this type of financing, we have extensive experience developing solutions for companies across many industries, asset classes, and economic cycles.

Structure

  • Loan is typically structured as a revolving credit facility; funds can be re-borrowed as repayments are made
  • Availability is determined by advance rates against eligible accounts receivable and eligible inventory collateral
  • Advance rates and eligibility are based on quality and performance of the collateral
  • Commitment amounts begin at $10 million

Benefits

Asset based loans offer certain advantages over traditional loans:

  • Broad use of proceeds – working capital, acquisitions, debt refinancing, recapitalizations, management buyouts, capital expenditures
  • Fewer financial covenants – emphasis is on collateral performance
  • Predictable source of capital – borrowing availability is tied to company’s assets, which often maximizes liquidity, as opposed to borrowing against a multiple of earnings (EBITDA), which may be more volatile
  • Applicable to most industries – retail, manufacturing, distribution, wholesale, business services