Asset Based Lending - LC Alternative Funding
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Asset Based Lending

Kick Your Asset Value Up a Notch

Accounts Receivable Factoring – essentially selling your accounts receivable – is often a solution for companies in need of financing, but for larger companies with a stronger credit rating and more comprehensive financial reporting and internal controls (monthly financial statements, aged A/R and A/P summaries), Liquid Capital’s Asset-Based Lending (ABL) solution provides an excellent financing option that is more cost-effective, flexible and discreet than factoring.

It is not always just small companies that find themselves long on orders but short on working capital. Many larger companies, with substantial client lists and sophisticated financial structures, still find themselves in situations where payables pre-date receivables. They simply don’t have the working capital to keep up. They may fall just shy of bank loan criteria, or if they do qualify, they have seasonal or otherwise time-sensitive capital requirements that the rigid structures of traditional bank loans can’t accommodate.

 

ABL: A Step Beyond

ABL provides all the advantages of factoring when it comes to leveraging the value of your accounts receivable, as well as providing additional financing by leveraging all your assets – including inventory, equipment and real-estate.

 

Larger ABL clients with strong financial reporting and internal controls may qualify for non-notification financing. With non-notification, you handle invoicing and collection activities and are paid directly. Payments are then deposited into a “sweep account” (typically at your bank) from which Liquid Capital collects. Your client is not aware that Liquid Capital is handling your financial transactions.

 

A further advantage is that – since our risk is lower due to your good credit and strong financial reporting – your rates can be significantly lower than they would be with a pure factoring solution.

 

For smaller ABL clients, the advantages of factoring are combined with the ability to secure additional funding by including your inventory, equipment or real-estate. Although these deals may not qualify for non-notification financing, the client benefits by receiving a larger amount of funding than if it were solely an accounts receivable factoring solution.

ABL IS ONE OF THE MOST FLEXIBLE, OPTION-RICH FINANCING ALTERNATIVES AVAILABLE, LETTING YOU SECURE FINANCING THAT INCLUDES – BUT GOES FAR BEYOND – THE VALUE OF YOUR ACCOUNTS RECEIVABLE.

How it Works

(Accounts Receivable)
You sell products & services to your customer.

You sell your invoices to Liquid Capital.

Liquid Capital sends funds minus the reserve.

You collect payment from customer and forward to Liquid Capital.

Liquid Capital refunds reserve minus the discount fee and pays down the ABL advance.

How it Works

(Other Assets: i.e. inventory, equipment, real estate)
You may have other assets such as inventory, equipment or real estate.

A value is assigned to these assets via appraisals or other means.

Liquid Capital assigns advance rates to the various asset categories.

Liquid Capital calculates how much the client can borrow.

Liquid Capital sends funds to the client.