Asset Based Lending
Leveraging Assets into Working Capital
Unlock Capital Using the Strength of Your Business Assets
At ClearCoast Capital, we believe your company’s assets should fuel your growth, not hold you back. Our Asset-Based Lending (ABL) solutions unlock the value in accounts receivable, , inventory, equipment and other collateral to provide the liquidity your business needs. Whether you’re expanding quickly, navigating seasonal swings, or looking for capital beyond traditional bank limits, our ABL approach gives you the financial flexibility to keep moving forward.
What is Asset-Based Lending?
Asset Based Lending is a form of financing that uses a company’s assets as collateral to secure working capital and term loans.. Unlike traditional bank financing, which often depends heavily on credit history and past performance, ABL looks directly at the strength and quality of your assets and less on your company performance.
ClearCoast Capital structures ABL facilities around your business model, combining different asset types such as receivables, inventory, and equipment to maximize borrowing power. This makes ABL an ideal solution for businesses that need a more dynamic, tailored funding option than a standard line of credit.
Today, ABL has evolved into a widely used solution for companies across industries that need liquidity to support growth, restructuring, or operational demands.
How Asset-Based Lending Works
ABL begins with an evaluation of your company’s assets, focusing on their collateral value and liquidity. While profitability and cash flow remain important considerations, the emphasis is on what your assets are worth today and how they can support ongoing funding.
Unlike conventional credit facilities that lean on financial ratios alone, asset-based loans are structured with borrowing bases tied directly to asset classes. As your receivables, inventory, or other assets grow or increase in value, your access to capital grows too, giving you a financing solution that scales with your business.
ClearCoast Capital works closely with you to design an ABL facility that aligns with your operational needs and long-term objectives, ensuring you have reliable working capital when you need it most.
Get the cash you need!
Get the cash you need!
How Businesses Qualify for Asset-Based Lending or What Lenders Look For in Asset-Based Lending
Qualifying for an ABL facility involves a detailed review of your company’s assets and financial operations. While the exact process varies, it generally includes:
Valuation of Assets
Each asset type—such as receivables, inventory, equipment, and or real estate is assessed for different values ranging from Fair Market Value to its liquidation value. The more marketable the asset, the higher the advance rate potential. Third party appraisals and on-site audits are often part of the valuation step.
Determining Your Lending Capacity
To establish available funding, ClearCoast reviews its diligence and sets a borrowing base. Common ranges include:
- Accounts Receivable: Advances up to 90% on receivables less than 90 days old, based on approved account debtors, .
- Inventory: Generally 50% or less of cost value, based on marketability and overall exposure.
- Equipment: Around 80% of appraised value, depending on the appraisal.
Covenants & Monitoring
ABL facilities usually include reporting requirements to ensure the collateral base remains strong and transparent and the financial metrics of the Company are stable.
Repayment Structure
ClearCoast’s revolving facilities have no formal repayment schedule. They flucate depending on your asset values and working capital changes. Term loans have repayment schedules tied to the useful life of the asset. This keeps your borrowing base current and ensures funds remain available whenever you need them.
ClearCoast Advantage
Asset-Based Lending
Expanded Access to Capital—Financing capacity is determined by the strength of your assets rather than relying solely on historical cash flow.
Flexible Structures—Our facilities are designed with fewer restrictive financial covenants, giving your business greater operational freedom.
Maximized Asset Value—By leveraging multiple asset types, businesses can unlock liquidity from receivables, inventory, and other collateral to support growth.
Cost-Efficient Financing—Asset-based lending can provide a more economical alternative to highly leveraged or short-term debt solutions.
The Qualification Process for ABL
The qualification process for asset-based lending often involves the following steps:
Collateral Valuation
Establishing a Borrowing Base
Setting a baseline based on the asset's value and the lender's comfort level for liquidating those assets will result in a borrowing base that provides an ongoing guideline for how much advance may be given. A typical borrow base may be as follows:
- Accounts Receivable: Up to 90% of the receivables aged less than 60 days, based on approved account debtors, subject to reduction for doubtful accounts or historical offsets.
- Equipment: 60% of the approved value, based on the type, age, and market conditions for the particular equipment.
- Inventory: 50% or less of the approved value on a cost basis, which may be limited based on the marketability of the inventory, the overall value of the receivables, or the lender's inventory exposure on the facility.
Agreement on Line Covenants
Implementing a Repayment Process
ClearCoast Advantage
Asset-Based Lending
Reliable Liquidity—An effective financing option for businesses in capital-intensive industries that require consistent working capital.
Broader Qualification —Businesses with imperfect credit histories may still access funding when supported by strong underlying assets.
Collaborative Financing—We often structure facilities alongside existing bank relationships, helping expand borrowing capacity while maintaining stability.
Strategic Growth Capital—Leverage your existing assets to pursue acquisitions and take advantage of new market opportunities.