FAQ

Asset-based lending (ABL) is a type of financing where loans are secured by a company’s assets, such as accounts receivable, inventory, equipment, or real estate. The loan amount is typically determined as a percentage of the appraised value of these assets.

Common types of collateral in asset-based lending include:

• Accounts receivable
• Inventory
• Machinery and equipment
• Real estate
• Medical billing receivables
• Intellectual property

The amount you can borrow depends on the value and quality of your assets. At Siena, we work closely with clients to structure loans that maximize liquidity based on the asset and credit quality.

For example:

• Up to 100% of the value of eligible accounts receivable
• Up to 75% of qualified inventory
• Up to 80% of the appraised value for equipment financing

To qualify for asset-based lending, you generally need:

• Annual revenue of at least $50 million
  
• Acceptable credit history
  
• Detailed financial statements.
  

In asset-based lending, asset quality is often more important than traditional credit scores.

Unlike traditional bank loans, which often focus on cash flow and credit scores, asset-based loans prioritize the value of collateral. This allows businesses with fluctuating cash flows to secure financing based on tangible assets.

The funding process for asset-based loans typically takes between 30 to 60 days to close, depending on the complexity of the transaction.

Asset-based lending is commonly used by businesses in industries such as:

• Manufacturing
• Wholesale distribution
• Retail
• Healthcare
• Companies with seasonal cash flow fluctuations

In the healthcare sector, asset-based lending is utilized by:

• Skilled nursing facilities
• Medical transportation companies
• Pharmaceutical and biotech companies
• Medical device companies
• Home health agencies
• Diagnostic imaging centers
• Managed care organizations
• Hospitals