Manufacturers And ABL: Growth Without Loans

June 8, 2017 by CNH Finance, LP in category “Financing”

Manufacturers who are trying to position themselves for growth require a good source of working capital. Large and unexpected orders can place a strain on finances and require a shift in resources which can threaten to turn operations upside down. Lately, manufacturers have been pushing traditional bank loans to the sidelines in favor of ABL.

What Is ABL?

ABL, or asset based lending, is a revolving line of credit structured around the value of fixed assets owned by a manufacturing company. Because manufacturers own equipment, inventory, receivables, vehicles, and sometimes their own facilities, the amount of financing available through ABL is typically higher than other industries. An in-depth analysis is performed to get manufacturing businesses the top value for their fixed assets, taking into account many items which are overlooked by traditional lending institutions. Keep in mind that only assets which are owned by manufacturing companies can be used for asset based lending. Items such as leased equipment or facilities do nto qualify for this type of financing.

Why Manufacturers Use ABL Instead Of Loans

Loans create debt, and offer a finite amount of financing. The burn rate for manufacturers when we look at purchasing materials, equipment maintenance, payroll, distribution, and other factors, is also quite high compared to other industries. The funding from bank loans can be used very quickly, leaving debt which can take years to repay. ABL is a debt-free solution. The revolving business line of credit created through asset based lending means the source of working capital can be replenished after it is used. ABL gives manufacturers a source of long-term capital.

Growth Capital Without Debt

Asset based lending stands apart from traditional funding solutions because ABL grows with manufacturing companies. As manufacturing companies see an increase in sales, purchase new equipment, move into large facilities, or make other improvements, the amount of financing available through ABL also grows. Asset based lending provides a working capital solution that promotes growth and success, instead of weighing down businesses with debt, hidden fees, and arbitrary terms.

Manufacturers Use ABL From CNH Finance

CNH Finance works directly with business owners in the manufacturing industry to provide the best asset based lending solutions. Our asset based lending program gives manufacturing companies the most financing for their fixed assets and receivables, reducing and even removing the need to rely on traditional bank loans for working capital. Contact our offices today to learn more about ABL from CNH Finance.

Image for 'Medical Equipment: Getting Financing For The Tools In Your Practice'
Medical Equipment: Getting Financing For The Tools In Your Practice

From small private practices to large healthcare center, medical professionals provide an invaluable service to people across the country. Unfortunately, the one thing all medical…

Image for 'Business Assets Defined: Fixed, Soft, And Intangible'
Business Assets Defined: Fixed, Soft, And Intangible

For new entrepreneurs, the term “business assets” gets thrown around quite a bit. Banks and private lenders alike will often ask for a list of assets when new business owners are…

Image for 'Bethesda, MD Assisted Living Centers: Finding Renewable Working Capital'
Bethesda, MD Assisted Living Centers: Finding Renewable Working Capital

Bethesda, Maryland assisted living centers provide housing and services to an increasingly growing population. However, between staggered payment schedules, and the high cost of…

Image for 'Newport, CA Dental Practices: Finding Capital without Loans'
Newport, CA Dental Practices: Finding Capital without Loans

Newport, CA dental practices are rethinking funding models. Gaining a strong foothold in today’s economic landscape can be challenging, and debt-based financing doesn’t help. More…

CNH Finance
24 East Ave #1285
New Canaan, CT 06840
Phone: (203) 266-3210

Business Development
Long Beach, CA 90803
Phone: (562) 833-7815

Business Development
3334 E. Coast Hwy, Suite 541
Newport Beach, CA 92625
Phone: (714) 520-1788

Melinda Ficek

Maryland Office
3 Bethesda Metro Center, Suite 723
Bethesda, MD 20814
Phone: (301) 529-9993

Steve Silver

Business Development
5050 Quorum Drive, Suite 700
Dallas, TX 75254
Phone: (972) 687-9157

Rossi Felix