What is Asset Based Lending?
Asset based lending (ABL) is the practice providing a business financing based upon monetizing the company’s balance sheet. If a company has assets such as accounts receivables, real estate, inventory, equipment and machinery, they can use them as collateral to obtain financing. Aside from lines of credit, other forms of asset-based lending includes merchant cash advances, factoring, equipment leasing and invoice financing. When the asset based lender provides funding to the company, they will then place a lien (UCC-1) on the asset.