Asset-based financing is typically structured as a revolving line of credit and secured by a company's accounts receivable, inventory, equipment, and/or real estate.
He added that borrowers are also driven to
asset-based financing structures because "they like the efficiency of the financing," and that there is little or no float at the end of each quarter.
Asset-based financing allows assets to be leveraged from within a target business, offering a highly flexible financing option that can provide the necessary capital required to complete the transaction.
RELATED ARTICLE: Why Consider
Asset-Based Financing?
From his perspective, he said he's seen a marked increase in the number of home furnishings companies turning to
asset-based financing. HFN spoke to Lucas about the financial climate that is driving this trend.
Factoring--a method of
asset-based financing in which receivables are purchased or used as collateral--can provide immediate cash.
In 1992, he joined Gordon Brothers and founded GBFC a specialty commercial finance company focused on
asset-based financing to retailers.
White Oak Asset Finance, GP (WOAF) provides
asset-based financing solutions including invoice discounting, supply chain finance and inventory finance to small- and middle-market companies throughout the United States.
Cattles Invoice Finance in Birmingham helped structure the deal as well as providing nearly pounds 1 million in
asset-based financing.
In another case, a company obtained
asset-based financing for the buyout of a $40-million distribution company and was able to reduce its loan by 40 percent within 10 months after the transaction by reducing inventory levels significantly below the historic precedent.
Bibby Financial Services (BFS) is supporting Houston-based United Plastics Group (UPG) with an
asset-based financing facility, the company said.
'Bibby Financial Services is a leading finance company known for our superior customer service and ability to provide large factoring facilities and
asset-based financing at competitive rates,' said Barry Kastner, Bibby Financial Services executive vice president.