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Asset Based Lending involves providing loans secured
Asset Based Lending involves providing loans secured by a company’s assets—whether accounts receivable, inventory, equipment, or real estate. Unlike traditional loans that rely heavily on credit history or profitability, ABL focuses on the quality and liquidity of the borrower’s assets. This makes it particularly suitable for companies with strong balance sheets but variable cash flows, giving them a dependable financing option during periods of expansion or transition.
One of the key advantages of Asset Based Lending lies in its flexibility. Manufacturers, distributors, and retailers often rely on ABL to strengthen their working capital, support mergers and acquisitions, or manage seasonal fluctuations in demand. Since loan amounts are directly tied to the real value of assets, businesses can often secure higher levels of funding compared to unsecured loans—without diluting ownership or sacrificing control.