Behind The Scenes In Asset Based Credit Facilities

OVERVIEW – Information on the asset based revolving credit line in Canada. ‘ABL’ borrowing is a solid way for any company to achieve business lending success

The ABL asset based revolving credit line in Canada just might be the ‘ APP ‘ you’re looking for when you require business financing and liquidity in a total solution sense. These days it’s all about ‘ APPS’ we hear – they are handy, do the job more quickly, and are unique. That’s why it occurred to us that Asset based credit facilities are our version of a business financing ‘ APP; let’s dig in.

There’s not a lot of argument these days around the factor that business owners in all sectors, particularly SME (small to medium enterprise) at least feel that the prospects of business financing solutions are limited. That’s where the ‘old ways’ don’t work, and the ‘new ways’ are being searched out. Asset credit lines are the new way.

This type of credit facility embodies practicality. And truth be told while we are positioning it as a solid alternative to commercial bank credit lines the reality is that it can be used to acquire business, or even help a company rise from the ashes when it’s been in somewhat dire straits. The only requirement? Assets!

So what is the facility and how does it work.

Think of it as borrowing power against your total pool of business assets. It allows you to borrow, at all times, against the collateralized value of your business assets – and that’s the usual suspects: INVENTORY, A/R, EQUIPMENT, and REAL ESTATE.

While the business owner and manager might view this as a bit more of a specialized financing the reality is that it provides the same working capital and cash flow that you would get from a Canadian chartered bank. The only difference – more borrowing power!

It’s been clear to us for quite awhile now that the ABL borrowing line has appeal to a broad brush of Canadian business. Those categories:

Companies who don’t qualify for bank credit
Companies who don’t qualify for enough bank credit!
Refinancing of a business
Acquiring another company
Start ups
High growth scenarios
Management buyouts

While we speak typically of the asset based revolving credit line in terms of the ‘ total solution’ encompassing all your business assets there are a number of, let us call them ‘ subsets’ of this method of financing. These subsets include:

A/R Financing
Inventory finance
PO/Contract financing

The above niche type of financings are available at all times to business borrowers depending on your unique need and industry specifics.

ABL credit lines on a day to day basis work the same way as commercial bank credit lines. The ABL lender though imposes more reporting and in some cases funds coming in (not going out) may be directed to a blocked account that repays your ABL lender on a revolving basis.

If you want to get behind the scenes on that business ‘ APP’ called ABL seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you make that work.

Stan P

Author: Stan Prokop – founder of 7 Park Avenue Financial

Originating business financing for Canadian companies, specializing in working capital, cash flow, and asset based financing. In business 10 years – has completed in excess of 90 Million $$ of financing for Canadian corporations. Core competencies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details:


Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171