An asset-based loan is secured/collateralized by a company's accounts receivable, inventory, equipment, and/or real estate. The lender takes a first priority security interest (Senior Position aka Senior Debt Financing) in the assets being financed. A specialized method of providing structured working capital and term loans that are secured by accounts receivable, inventory, machinery, equipment and/or real estate. Advance of funds are based on a percentage of the eligible accounts receivable. When AR & INV convert to cash the advances are re-paid accordingly.
An ABL is typically comprised of a revolving line of credit that does not have a typical structured repayment plan and is on an interest-only basis. MB Business Capital will advance funds on eligible accounts receivable-up to 85% and eligible inventory-up to 60%. Higher advance rates are available based upon appraisal and to meet seasonal needs.
Senior Debt may also include an asset-based term loan secured with machinery and equipment. MB Business Capital term loans are based on appraised value of M&E, and appraised fair market value of real estate and capital expenditure facilities to finance new equipment. MB Business Capital’s term loans include regular periodic payments of both principal and interest in order to repay the debt at a set maturity date. ABL loans using real estate as collateral usually have longer maturities than M&E loans because M&E typically have a shorter economic life expectancy compared to RE. MB Business Capital’s M&E loans can be amortized up to 7 years and RE up to 15 years.
MB Business Capital also offers senior stretch facilities that will include cash flow loans up to 25% of the total facility. The cash flow loan is supported by sufficient cash flow to repay principal, generally within 24 months.
Loan Commitments=$5MM-$50MM (Syndication up to $100MM)
Interest Rates-Based on Prime and LIBOR.
to see our lending parameters.