Asset-based lending lets you turn assets you already hold — like unpaid invoices or inventory — into working capital. Because the funding is secured by those assets, the amount you can access is tied to their value rather than to your credit score alone.
What asset-based lending is
Asset-based lending (ABL) is financing secured by your business assets — most often accounts receivable and inventory, and sometimes equipment or other collateral. The provider sizes your funding against a borrowing base: a percentage of the value of the eligible assets you pledge.
How it works
- You pledge assets. Commonly outstanding receivables and/or inventory.
- Funding scales with asset value. You can typically draw a percentage of the eligible asset base.
- It adjusts as assets turn over. As receivables are paid or inventory sells, the available amount moves with them.
- Structure varies. It may be revolving (like a line) or arranged as a term facility.
Typical terms
- Amount: scales with the value and quality of the assets you pledge.
- Cost: depends on the assets and structure.
- Flexibility: often revolving, so it grows as your receivables or inventory grow.
These are typical characteristics for illustration, not an offer.
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Check eligibility →When it makes sense
ABL tends to fit businesses that carry significant assets:
- You have sizable accounts receivable or inventory you want to convert into cash.
- You’re in a sector like wholesale, manufacturing, distribution, or staffing.
- You want funding that grows alongside your asset base.
What you’ll typically need
- Quality assets to pledge — for example, creditworthy receivables or sellable inventory.
- Recent financials and details on those assets.
The strength and quality of your assets are central to approval.
Frequently asked questions
What assets can I borrow against?
Most commonly accounts receivable and inventory, and sometimes equipment or other collateral. Eligibility depends on the provider and the quality of the assets.
Is it a loan or a line of credit?
It can be either. Asset-based facilities are often revolving, but some are structured as term arrangements, depending on the provider.
How is the amount determined?
Providers use a borrowing base — typically a percentage of the value of your eligible assets — so the amount scales with what you pledge.
Which industries use asset-based lending?
It’s common in wholesale, manufacturing, distribution, and staffing — businesses that carry substantial receivables or inventory.
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See my funding options →This page is for general educational purposes and is not financial advice. Access Funding Network is a free matching service, not a lender. Funding products, amounts, rates, and terms are offered solely by independent third-party providers and are subject to their underwriting. Amounts and terms shown are typical industry ranges for illustration only and are not an offer or guarantee. Not all applicants will qualify or be matched.