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With each passing year, more and more organisations are finding that Asset-Based Lending (ABL) offers some very attractive benefits when it comes to raising finance.
As its name suggests, this vehicle allows a business to borrow money against assets it owns. These include the sales ledger, stock, property, plant and machinery, as well as intangible assets such as trademarks and other intellectual property.
The resulting finance can then be deployed for a host of business uses, including management buy-outs, corporate acquisitions or financial restructuring.
Why Asset-Based Lending?
Some of the many advantages delivered by ABL include:
- A company can raise significant cash without, for example, having to look for venture capital or having to part with slices of that business
- ABL can be key in transactions such as buy-outs or acquisitions, often raising more funds, more cost-efficiently, than traditional overdrafts
- It can be a useful tool in dealing with an exiting shareholder, or to boost stock levels for a seasonal peak
- ABL is not dependent on existing profitability
- It allows businesses to grow without additional banking restrictions.
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