Asset-Based Lending
LEVERAGE ACCOUNTS RECEIVABLE TO FREE UP CASH FLOW
Asset-based lending is a form of secured lending that is based principally on the quality and value of accounts receivable due from customers around the globe. Use funds for bank debt refinancing, working capital, growth strategies, acquisitions, shareholder or management buyouts, or recapitalizing your balance sheet.
This solution is well-suited for manufacturers, distributors and service providers with a leveraged balance sheet who need additional working capital.
- Structured as a revolving line of credit with the timing of advances tailored to your needs.
- TFS will advance funds based on an agreed-upon percentage of the accounts receivable value.
How it works:
The CLIENT sends the invoice to the CUSTOMER.
TFS advances a predetermined percent of the Accounts Receivable to the CLIENT, creating a revolving loan.
When due, the CUSTOMER pays the invoice to the CLIENT.
The CLIENT pays down the revolving loan with TFS.
Advantages:
- Borrower’s receivables determine how much they can borrow so asset-based lending is the right product for growing companies
- Higher availability against customer concentrations
- Highly predictable method of financing for financial planning
- Offers more flexibility compared to traditional bank lines
- Funds seasonal changes in working capital
- Patient capital for companies facing cyclical or operating performance issues
- Can be used as transitional capital until company returns to bank financing