Pro Funding Options
Borrow against what your business already owns.
Asset-based loans use your accounts receivable, inventory, equipment, or real estate as collateral — unlocking larger credit lines at better rates than unsecured options.
What asset-based lending actually is
Asset-based lending (ABL) is a category of secured business financing where the loan amount is tied to the value of specific business assets — accounts receivable, inventory, equipment, or real estate. The lender advances a percentage of the asset value (the “borrowing base”) and can typically scale credit up as your assets grow.
Asset-based loans are the right fit for businesses with significant balance-sheet assets but uneven cash flow or weaker credit profiles. Because the loan is backed by hard collateral, the rates are much lower than unsecured options.
Common structures: revolving lines of credit secured by AR and inventory, term loans secured by equipment or real estate, or hybrid structures combining both.
How asset-based lending works
The lender evaluates the assets you’re pledging — aging of AR, condition of inventory, equipment appraisal, real estate value. The borrowing base is a percentage of those asset values: 80–90% for high-quality AR, 50–65% for inventory, 75–100% for equipment.
You draw against the line as needed; your available credit moves up and down with your asset values. Some ABL facilities require monthly borrowing-base certificates and field audits to verify collateral.
Rates are typically prime + 2–6% (much lower than unsecured business credit). Total facility size scales with your business: as you grow, your available credit grows with you.
What to weigh before you apply.
Pros
- Larger credit lines than unsecured options
- Lower rates because the loan is backed by hard collateral
- Credit availability grows as your business assets grow
- Works well for businesses with strong assets and weaker P&L
Cons
- Monthly reporting, borrowing-base certificates, and field audits
- Higher minimum facility sizes (typically $250K+)
- Loss of pledged asset on default — not just a hit to credit
- Setup process is longer than alternative finance products
Wondering if you'd qualify?
Two-minute pre-qualifier. Soft credit pull only — no impact to your score.
Questions before you apply.
Is asset-based lending the same as invoice factoring?
No. In factoring, you sell your invoices to a third party. In ABL, you borrow against them and continue collecting from your customers yourself. ABL keeps you in control of customer relationships.
What kinds of assets count as collateral?
Most commonly: accounts receivable, finished-goods inventory, machinery and equipment, and commercial real estate. Some lenders also lend against IP, patents, or specific commodity inventory.
How long does setup take?
Typically 3–6 weeks from application to close. Field audits, appraisals, and intercreditor agreements all add time.