FAQs
Asset-Based Lending (ABL) refers to loans, or lines of credit, secured by balance-sheet assets: accounts receivables, inventory, machinery and equipment, real estate and even intangibles, like intellectual property. ABL is also commonly known as a working capital loans, or revolvers.
EGC Asset Based Loans can:
- Finance growth
- Take advantage of supplier discounts
- Increase purchasing power with vendors
- Fund acquisitions
- Purchase new equipment and materials
- Prepare for seasonal demand
- Finance turnaround situations
- Work with weak financial performance and upside-down balance sheets
- Increase marketing spend
Whatever situation your business is facing, an EGC ABL facility enables you to access your business assets to provide the cash flow you need, when you need it. Reach out now to explore how EGC can help your business grow!
At EGC, our sole focus is to help your business grow and thrive. Utilizing our combined 100+ years of experience we craft flexible financing solutions that are tailored to your business and financial requirements. Clients often stay with EGC for years, if not decades, because they know when they need a financial solution, EGC is there with a helping hand and the ability to work through a client's ups and downs. We work quickly too, so that you can generate the cash you need, when you need it.
The time it takes to set up a facility can vary depending on the complexity of your business and the time it takes you to provide financial and legal information. Generally, we can provide funding in as little as ten business days.
After a brief discussion to understand your business and goals, we send a punch list of items to help our analysis. Once received, we review your information and send you a detailed funding proposal. After you sign your funding proposal and provide a good faith deposit, due diligence commences, and you receive the legal documents shortly after credit approval. Funding occurs as soon as documents are executed and returned to EGC.
ABL is typically easier to qualify for than bank lines as the facility is based directly on your company's assets. Utilizing decades of experience and proprietary systems and controls, EGC is able to be more aggressive than your typical bank or even larger finance company. While cost of funds from a bank can be lower, there are costs associated with staying in strict compliance with various covenants or restrictions to keep your business in the banker's box.
EGC provides both services. While there are similarities, there are significant differences. They are similar in that they both involve accounts receivable as the primary collateral. The differences are: Factoring is the sale of the accounts receivable whereas ABL is a loan against a borrowing base that is typically composed primarily of accounts receivable but can include a wide variety of assets, including but not limited to: inventory, machinery & equipment, real estate, and in some cases certain, intangible assets. Factoring considers the credit of your customer as the primary concern. Pricing Structure differs: ABL pricing uses an interest rate that is charged against the average loan amount outstanding on a monthly basis. Factoring pricing is typically a small percentage of each invoice that increases incrementally while an invoice is outstanding. On a yield comparison, ABL is typical less expensive than factoring. However, factoring may prove advantageous in circumstances like seasonality, significant customer concentrations or short term accommodations.
EGC is industry agnostic; our clients past and present represent a full spectrum of industries including but not limited to: Manufacturing Traditional Wholesale distribution E-Commerce Consulting Staffing Marketing Tech Lender Finance from manufacturing and traditional wholesale distribution, to, consulting, marketing technology and E-Commerce. Products and services can range from staffing to ball bearings on satellites orbiting the globe. Clients typically have revenues from $3 Million to $150 Million and are in need of initial funding between $1Million and $10 Million.
Asset based lenders do not take equity. We a capital provider, not an investor. Although we care about management, we trust that you know best how to use our capital to run your business.
Typically, Asset Based Loans are revolving lines of credit that increase or decrease based on a business's sales volume. Initial terms are usually 2-3 years. Alternatively, an MCA is a short-term vehicle (6-24 months) that must be paid in full. MCAs are also typically far more expensive than an ABL.
Call or email us to have a confidential chat with our team to explore your business and financing needs.