What Is Asset-Based Lending (ABL)?

When a business needs more funding than invoice finance alone can provide, asset-based lending can unlock the value tied up across the whole balance sheet — not just unpaid invoices.

What Is Asset-Based Lending?

Asset-based lending (ABL) is a funding facility secured against a range of business assets. Invoice finance is usually the core, but ABL can also lend against stock (inventory), plant and machinery, property and sometimes other assets — combined into a single, larger facility.

How ABL Works

The lender assesses the value of your eligible assets and advances funds against them, typically a percentage of each asset class. As those assets change — invoices raised, stock turned over — the available funding flexes with them. This can release significantly more working capital than financing invoices alone.

Who It Suits

ABL tends to suit larger or asset-rich businesses — manufacturers, wholesalers and distributors, and companies going through growth, acquisitions, restructuring or management buyouts. It's often used where the funding requirement is too big or too complex for a standard invoice finance line.

Points to Consider

ABL facilities are more complex, with valuations, monitoring and sometimes covenants. Assets are used as security, so your business must be comfortable with that. Costs include fees and interest, and there may be audit and valuation charges. It's usually best arranged with a specialist who understands your asset base.

Compare Invoice Finance and ABL Options

If your funding needs go beyond invoices alone, Dynesourcer can help you explore asset-based lending and invoice finance options: https://www.dynesourcer.co.uk/mortgages/invoice-finance-sourcing

Final Thoughts

Asset-based lending can be a powerful way for asset-rich businesses to unlock working capital and fund ambitious plans. Because it's more complex than standard invoice finance, comparing options and taking advice is especially important.

Important information

Asset-based lending and invoice finance for limited companies and LLPs are generally not FCA-regulated and typically fall outside the Consumer Credit Act 1974; sole traders/partnerships may have different protections. This article is not financial, legal or tax advice or a personal recommendation. Rates and figures are indicative and subject to change; finance is subject to status, eligibility and provider terms. Seek independent professional advice before entering any arrangement.