Wholesale distributors have historically focused on operational excellence ...
ASSET-BASED LENDING
A CREATIVE APPROACH TO ASSET-BASED LENDING
Custom financial solutions to help businesses achieve sustainable growth.
MAKE YOUR ASSETS WORK FOR YOU
Our mission is to finance your long-term profitable growth and to do so with maximum flexibility. We offer personalized solutions like asset financing with a white-glove service. Each of our asset-based lending credit facilities is custom-designed to meet the individual needs of your business, taking into account trade cycles, seasonality, customer base and more.
BENEFITS OF OUR ASSET-BASED LENDING PRODUCTS
Gain Financial Stability & Predictable Cash Flow
Asset financing helps stabilize operations for companies that are growing rapidly, have tight cash flows, or have seasonal revenues.
Fewer Covenants
Our asset-based financing options have fewer covenants than conventional lines of credit. Managing the line and staying in compliance is substantially simpler.
Fast Access to Cash
Asset-based financing gives you quick access to financing when required – Tap into your assets to generate the cash
Flexible Funding
As an asset-based lender we customize solutions and contract terms that match the requirements of your business.
Improve Your Cash Flow
Flexible Financing to businesses that are experiencing accelerated growth.
Works For Businesses at any Growth Stage
Asset-based lending is suitable for small & medium businesses as well as large corporations.
ASSET-BASED LENDING IS
CUSTOM TO YOUR BUSINESS
Asset-based Lending is a great solution for your business if you are a:
Young, fast-growing companies
Businesses needing financing up to $50M
Companies with at least two years of financial history
Long-standing businesses
In growth mode or facing financial challenges
Companies needing flexible financing
WAYS YOU CAN USE ASSET-BASED LENDING
As an asset financing company we allow founders and company leaders to leverage assets while optimizing ownership structure and minimizing dilution of equity. Employing debt enables the flexibility to complement equity and provide additional working capital for business.
GROW YOUR INVENTORY
EXPAND TO NEW MARKETS
LAUNCH A NEW PRODUCT LINE
PAY SUPPLIERS
CASE STUDIES
DO THESE SCENARIOS SOUND FAMILIAR TO YOU?
Whether you’re going through a period of growth or need some leverage during a turnaround scenario, eCapital can help with our asset-based lending options. Here’s an example of a few clients we’ve helped:
POPULAR FRAGRANCE BRAND OUT OF CA, USA
OVERVIEW
A wildly-popular Fragrance Brand needed additional working capital to navigate seasonality and prepare for production & distribution acceleration.
PROBLEM
While operations were running smoothly and yearly revenue numbers were performing above expectations, this Fragrance Brand had its sights on aggressive growth. Having reached its maximum credit capacity within its current facility at a prominent bank, this Fragrance Brand needed a short-term boost in working capital to accelerate growth.
SOLUTION
This Fragrance Brand reached out to eCapital for help. We reviewed their business statements, and helped them understand their options for turning their long-term assets into easily accessible cash flow solutions. After assessing their A/R, inventory, production equipment, real estate & IP (brand equity), eCapital provided this Fragrance Brand with a $20mm facility. The company will use the funding to sustain operations through peak seasons and accelerate the business for the future.
MANUFACTURER & DISTRIBUTOR OUT OF SC, USA
OVERVIEW
Manufacturer & Distributor of watering products and accessories needed additional working capital to invest in improving operational efficiencies throughout its various brands.
PROBLEM
Changing market conditions forced this Manufacturer to research & develop new product lines for its various brands. To do so, this Manufacturer needed a short-term working capital injection to invest in its operations in several manufacturing facilities and distribution hubs. Their current lender could not provide this Manufacturer with a higher credit limit even though their breakeven point/payback period was predicted to be 15 months.
SOLUTION
eCapital provided this Manufacturer with a $35MM facility backed by A/R, equipment & inventory. Funded by a prominent private equity sponsor, the company will use the working capital from eCapital to support operations across its multiple brands and manufacturing and distribution facilities.
PRIVATE LABEL CANDLE MANUFACTURER MI, USA
OVERVIEW
Private Label Manufacturer & Distributor of wholesale and custom candle products & accessories needed working capital to invest in R&D and operational expansions.
PROBLEM
This Manufacturer had a sizable government loan at a minimal rate which was provided during the pandemic in 2021. While the low rate offered the business plenty of short-term flexibility, the amount of financial & business covenants, coupled with extensive reporting, were restricting the efficiencies of their operations to the point where the advantages of the low rate were outweighed.
SOLUTION
eCapital quickly provided a $40MM facility for one of the largest candle producers in the U.S. This afforded the Manufacturer the ability to close and transition from their government loan agreement before year-end. Supported by a private equity sponsor, it will use the ABL-backed line of credit from eCapital to support continued product innovation and expansion among its multiple brand names and private labels.
200+ FLEET OPERATION OUT OF CHICAGO, IL, USA
OVERVIEW
Equipment refinancing is used to leverage the equity in a fleet of Chassis trailers get the cash needed for important growth.
PROBLEM
Having reached the max in facility size at their current factoring company, this Chicago trucking company’s growth trajectory had stalled. As a fleet of 200 trailers, 180 were owned outright, leaving 20 brand-new trailers under bank loans. The trucking company was experiencing extreme cash strain. They needed more cash to keep the business running and position them to meet their business goals that year.
SOLUTION
The Chicago based trucking company reached out to eCapital, who reviewed the business statements and helped them understand their options. We first extended the trucking company’s facility limit to accommodate the fleet’s growth in A/R. We then were able to refinance the debt owed on the remaining 20 trailers in the fleet, which provided the company with the immediate cash needed for their business. In refinancing the existing equipment, this trucking company was able to reinvest in their business and regain competitive advantage in the market.
ASSET-BASED LENDING
YOUR 4-STEP PATH TO GROWTH
We are more than an asset-based lender, we are a strategic partner helping companies reach their goals and build for success. We support everything from young growing companies who need flexible financing to long-standing businesses that may recently have been facing financial challenges.
1. CHAT
Every journey begins with a vision–the story of how you got started and where you’d like to end up. We want to hear yours.
2. PLAN
What are your assets worth? Receivables, inventory, capital equipment, and even intellectual property. Let’s see what we’re working with.
3. BORROW
You’ve worked hard to reach this level of business success. It’s time your business worked for you.
4. GROW
Whether it’s a rapid asset-based line of credit or a strategic long-term financing plan, your path to progress starts here.
ADVANCE RATES ON VARIOUS COLLATERAL
We specialize in unique asset-based lines of credit and provide working capital by leveraging accounts receivable, inventory assets, and even intellectual property, to companies that generate between 2M to 100M of revenue per year.
eCapital Asset-based Lending typically offers advance rates on collateral of up to:
ON ACCOUNTS RECEIVABLE
ON THE APPRAISED VALUE OF M&E
ON FMV REAL ESTATE
ON NET ORDERLY LIQUIDATION OF INVENTORY
FREQUENTLY ASKED QUESTIONS
What is asset-based lending (ABL)?
Asset-based lending or sometimes called an ABL loan is a creative form of debt financing. It allows you to secure a loan based on the value of your business assets. With our asset-based lending program, you can borrow up to 90% of accounts receivable, 75% on the appraised value of M&E, 50% on FMV real estate and 75% on net orderly liquidation of inventory. You are borrowing in the form of a revolving line of credit, which is ideal, because you can use those funds whenever you need money. Since your physical assets are your collateral, there is maximum liquidity and fewer rules. Overall, this is an extremely flexible solution that bridges the buy-and-sell in your business so that you can accelerate your sales cycle.
How does ABL work?
ABL Is Formula-based. The formula is derived off of what is called a Borrowing base which is a snapshot of your assets and availability at a point of time. As our clients manufacture or acquire new inventory, and as they sell/ generate receivables from sales of that inventory, these new assets become available for inclusion in the borrowing formula.
What are the benefits of ABL versus bank financing?
Traditional bank loans are based predominantly on the stability of a company’s cash flow ratios, which can be difficult to maintain in volatile economic conditions. With asset-based lending, funds are generally delivered quickly, and approvals are flexible—which makes these loans suitable for businesses in several situations. Additionally, depending on your type of business, you may be able to generate a much larger loan with an asset-based loan. If you are looking into ABL financing options, be sure to ask potential lenders these questions, so you have all the details and don’t jump into any partnerships prematurely.
What are the benefits of ABL versus raising money?
Asset-based loans can be a much-needed source of capital for companies that are rapidly growing, in need of additional funds during seasonal periods, or undercapitalized. Raising money for your business can be a cumbersome, time-consuming process—and you might not have time to waste! And, investors or lenders may require equity or royalties when providing funds to support your business. Simply put, with an asset-based lending loan, your business remains your business.
How does ABL save me money?
With asset-based lending, you can power your business with flexible funding secured by using existing business assets such as inventory, machinery and equipment, and/ or real estate. These loans often have lower interest rates, which means you are more likely to save money over time.
What's the difference between Asset-Based Lending and Traditional Lending?
Asset-Based Lending (ABL) and Traditional Lending are two distinct forms of financing that differ in their underlying principles and structures. Here are the key differences between the two:
Asset-Based Lending (ABL):
- Collateral: ABL is secured by specific assets owned by the borrower, such as accounts receivable, inventory, equipment, or real estate. The lender evaluates and monitors the value and quality of these assets, which serve as collateral for the loan.
- Focus on Asset Value: ABL places significant emphasis on the value and liquidity of the borrower’s assets. The credit limit or loan amount is determined based on a percentage of the appraised value of the eligible assets.
- Borrowing Availability: ABL provides a revolving line of credit, allowing the borrower to borrow and repay funds within the established credit limit as needed. It offers flexibility in accessing working capital based on the value of the eligible assets.
Traditional Lending:
- Creditworthiness: Traditional lending primarily evaluates the borrower’s creditworthiness, financial history, and ability to repay the loan. It relies on factors such as the borrower’s credit score, income, business history, and financial statements.
- Fixed Loan Amount: Traditional loans provide a fixed loan amount disbursed upfront. The loan is typically repaid over a predetermined period with fixed monthly installments.
- Collateral and Personal Guarantee: Traditional loans may require collateral, such as real estate or equipment, depending on the loan amount and terms. Additionally, personal guarantees from business owners or directors may be necessary to secure the loan.
Overall, the key distinction between ABL and Traditional Lending lies in their approach to collateral and the primary factors considered for loan approval. ABL focuses on the value and liquidity of specific assets, while Traditional Lending emphasizes the borrower’s creditworthiness and financial history. ABL offers more flexibility in borrowing against assets, whereas Traditional Lending provides a fixed loan amount based on creditworthiness and repayment ability.
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See what we can do for your business.