Asset based lending for manufacturers - Using receivables to raise vital cash

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Information about Asset based lending for manufacturers - Using receivables to raise vital...
Finance

Published on February 27, 2014

Author: chrislehnes

Source: slideshare.net

Description

Asset-Based Lending (ABL) has become an established capital market product. Not only has ABL become an option outside of traditional bank financing for businesses to grow and sustain operations, but the big banks themselves dominate the ABL space. In the first three quarters of 2013, Bank of America Merrill Lynch and Wells Fargo claimed almost 50% of the ABL market share, completing 244 deals of over $28 billion.

2/27/2014 Asset-Based Lending for Manufacturers Asset-Based Lending for Manufacturers Asset-Based Lending (ABL) has become an established capital market product. Not only has ABL become an option outside of traditional bank financing for businesses to grow and sustain operations, but the big banks themselves dominate the ABL space. In the first three quarters of 2013, Bank of America Merrill Lynch and Wells Fargo claimed almost 50% of the ABL market share, completing 244 deals of over $28 billion. (source) ABL is a business loan or line of credit that is typically secured by inventory or accounts receivable, but any balance sheet asset can be considered by the lending institution as collateral. ABL has become an attractive financing option when compared to typical bank financing because a business’ credit rating is subservient to the quality of its assets. Manufacturing companies increasingly are using ABL as an alternative to bank financing. Even strong manufacturing companies that have healthy receivables often struggle with cash flow due to issues including: • having a capital intensive business. • reinvesting cash to fuel growth • having seasonal or inconsistent cash flow • being pre-profit and not wanting to do another round of dilutive equity At Gibraltar Business Capital, we like to work with our clients to get a big picture understanding of their needs and opportunities. We have an established history of partnering with manufacturing companies, looking at their business cases, and making structured accommodations to meet their needs. Here’s an example: Our Asset-Based Lending solutions are completed in an expedited time frame and without the typical restrictions often required by traditional lenders. Manufacturing companies have used our ABL facility to • grow a new revenue stream • start or enhance sales and marketing efforts • boost inventory for the upcoming season • access cash during a slow season Asset-Based lending works well in critical moments when a business cannot wait for a bank to make a decision on a loan. Gibraltar Business Capital believes strong inventory, healthy receivables and http://secure.campaigner.com/Campaigner/Public/t.show?6dlo2--3g4tq-o2g4ed8&_v=2 1/2

2/27/2014 Asset-Based Lending for Manufacturers decent credit are good barometers of a business’ strength. Relying less on net income or cash flow, we will work with you to get you access to the capital you need now to grow your business tomorrow. You can learn more about Asset-Based Lending right here... Or contact me: Chris Lehnes SVP, Loan Originations clehnes@gibraltarbc.com 203-304-9527 http://secure.campaigner.com/Campaigner/Public/t.show?6dlo2--3g4tq-o2g4ed8&_v=2 2/2

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