What is Asset Based Lending?

Asset Based Lending, also known as ABL is a more advanced form of invoice finance, which in addition to debtors, also takes into account the wider assets of the business, including stock, property and plant & machinery. Asset Based Lending provides a flexible facility that works in a similar way in Invoice Discounting, but leverages cash locked up in other assets as well as just the debtor book.


Typically, Asset Based Lending is more commonly used by mid-sized and larger companies as the additional monitoring required to make the facility work tends not to be cost effective for smaller businesses.


The Asset Based Lending company takes a Debenture (fixed and floating charge) over the debtor book and assets of the business, meaning that if the business fails, it can step into the businesses shoes and collect the money owed. With this security, it allows the finance company to lend more than would usually be the case with an overdraft as the risk to them is typically lower.


The main advantage of Asset Based Lending is the ability to release cash tied up not only in the debtor book, but also stock holding and also property, plant and machinery, but often without the more onerous debt servicing obligations that come with conventional lending facilities such as a term loan. An Asset Based Lending facility will fluctuate in line with your businesses requirements, i.e. when your stock holding and debtor book reach higher levels, you will typically have a higher availability of borrowing. When compared to the rigidity of a term loan facility, it provides significantly more flexibility.


An Asset Based Lending facility can provide immediate and crucial cashflow for your business. Most ABL facilities are provided on a Confidential basis, meaning that you do not have to disclose to your clients that you are using the facility.

Key Features

Achieves a higher level of funding than Invoice Finance alone

By leveraging your stock and other assets as well as your debtor book, you can achieve a higher facility to fund your business


Bespoke funding solution, tailored for the needs of your business

All businesses and their requirements are unique so ABL facilities are tailored to suit the needs of your business


Improve your business cash flow

By unlocking money owed to your business, as well as those in other business assets such as stock, you will have more cash available to manage your cash flow


A facility that grows with you 

As your business grows, an Asset Based Lending facility grows with you, helping to smooth out cash flow hurdles that could otherwise hold your business back

Quick Enquire Now!

It's easy to get started with our quick apply form.

Make an enquiry by clicking the button on the right and we will contact you shortly to discuss your requirements

How does Invoicing Discounting Work?

Asset Based Lending Costs

Similar to Invoice Discounting costs, Asset Based Lending Costs vary from business to business but are broadly split into the following categories:

Arrangement Fee / Survey Cost
Some lenders will charge a fee to carry out due diligence, known as a survey and there may also be an arrangement fee, which is the cost of setting up the facility. Some will also charge a small annual renewal fee thereafter.

Service Fee
There is usually a service fee for the day to day administration of the facility, usually charged as a percentage of the gross invoice value but sometimes this can be a pre-agreed fixed monthly amount. When this is charged as a percentage, there is often a minimum monthly charge agreed at the outset.

Discount Fee
This is calculated as a percentage of the total funds you borrow.

Ancillary costs
Some invoice finance companies will charge additional ancillary fees, which can include CHAPS payment charges for when you need to draw down funds on the same day.

Is Asset Based Lending Right for your Business?

Asset Based Lending is a viable funding solution for many business sectors, but how do you know if it is the right solution for your business?


Firstly, Asset Based Lending is usually only suitable for larger businesses (i.e. turning over in excess of £10m per year and with a funding requirement of at least £1m) and those than have a combination of different assets, i.e. invoices, stock, plant & machinery and property.


If your business is growing, either organically or by acquisition, Asset Based Lending may well be a great solution but it can also work well for businesses in difficulty, or those that are looking to avoid raising debt that will lead to costly monthly repayments.


Businesses with distinct seasonality could also benefit from Asset Based Lending, for example a frozen food wholesaler that would have to stock up on ice cream during the summer or a toy retailer would likely have the same requirement on the run up to Christmas.


Cashflow will always be ‘king’, and by utilising Asset Based Lending you can help to alleviate the stress caused by cash flow worries by unlocking cash tied up in the businesses assets.


Contact us to speak to one of our experts and find out if Asset Based Lending is the right solution for your business.