Asset-based lending
Put your business assets to work in funding operations and growth. White Oak provides asset-based lending (ABL) solutions that connect receivables, inventory and other assets with funding for working capital, seasonal cash flow and acquisitions.
Discuss your financing needs
Capital access
Capital for operating and growing your business
Receivables, inventory and fixed assets can play a role in financing the next stage of your business. For companies with strong-performing assets, asset-based lending connects that value with the capital needed to keep operations moving and invest in growth.
White Oak helps businesses use asset-based financing for:
- Purchasing and working capital: funding raw materials and day-to-day operating needs.
- Seasonal cash flow: supporting funding needs as business activity changes through the year.
- Acquisitions and growth: accessing capital for an acquisition or the next phase of expansion.
We work with companies across North America, Europe and Australia, bringing industry know-how and hands-on guidance to their cash-flow and growth objectives.
For a UK small or medium-sized business, the purpose of the funding can also lead to a wider range of local options. White Oak UK's SME finance range addresses equipment investment, business development and buying or refinancing premises alongside working capital, tax and insurance payments.
Financing capacity
Your assets and financing capacity
White Oak's asset-based lending offering covers several forms of collateral:
- Intellectual property
- Inventory
- Accounts receivable
- Real estate
- Machinery and equipment
The financing conversation considers the assets alongside the amount and purpose of the funding. White Oak's ABL financing parameters are:
- Financing amount
- Up to $250 million
- Loan maturity
- 3 to 5 years
Advance rates and valuation
An advance rate relates financing to a particular collateral value. The basis of that value matters as much as the percentage.
| Collateral basis | Advance rate available |
|---|---|
| Eligible accounts receivable | Up to 95% |
| Appraised real estate | Up to 70% |
| Appraised machinery and equipment NOLV | Up to 85% |
| Appraised inventory NOLV | Up to 100% |
Net orderly liquidation value (NOLV) is the estimated value recoverable if assets are sold in an orderly manner over a reasonable period. It differs from purchase cost or retail price. An advance of up to 100% of appraised inventory NOLV therefore has a different basis from financing 100% of inventory purchase cost.
From facility size to available funds
In asset-based lending, the facility commitment is the agreed financing limit. The borrowing base reflects the value of eligible collateral under the agreement. Borrowing is ordinarily limited by both. The amount still available to draw also takes account of funds already borrowed and the facility's conditions.
These are different measures: the headline facility size and a business's total asset value do not, by themselves, tell you how much cash is available. Understanding their relationship helps you consider funding capacity alongside the timing of your business needs.
Funding structure
A structure for the funding need
The amount of financing is one part of the decision. How funds can be drawn and repaid also matters, particularly when operating needs change or funding sits alongside other debt.
White Oak's solutions include:
- ABL Revolvers & Term Loans
- FILO & Stretch Facilities
- Inventory Financing
- Invoice Discounting
- US Import/Export Facility
- Supply Chain Financing
Revolving credit and term loans
A revolving asset-based line of credit allows a business to borrow, repay and borrow again within agreed availability. That makes the draw-and-repay structure relevant to recurring working-capital needs. Term debt brings scheduled debt-service commitments, which matter when planning how a longer-lived investment will be repaid.
These general distinctions help frame the conversation about your use of funds and cash flow. The repayment terms and the way facilities work together depend on the agreed financing structure.
Factoring brings forward cash from existing sales through the purchase of approved receivables, while asset-based borrowing can also be supported by inventory and other eligible assets. White Oak's comparison of working-capital financing approaches explains how those mechanisms, trade finance and receivables programs differ in what is financed or arranged and the responsibilities involved.
Understanding FILO and stretch
First-out/last-out and stretch describe different aspects of financing. In a common first-out/last-out arrangement, two tranches, or portions of the financing, share a senior lien on the collateral but have different repayment priorities: the first-out tranche is repaid before the last-out tranche. The additional tranche can increase the overall advance, with a different position in the repayment order.
An over-advance, also called stretch collateral in ABL, is borrowing above the availability calculated by the borrowing base. It concerns the amount advanced relative to that base, while first-out/last-out concerns repayment priority.
These are general financing concepts. A discussion of a White Oak FILO or stretch facility needs to address the particular structure and how it fits with the business's other funding.
Flexibility
Flexibility as your business changes
White Oak's asset-based financing can support seasonal cash-flow needs and be structured to grow with your business, through a revolving line of credit or term loan. The aim is to connect the financing with the way your business uses capital as its needs evolve.
For a consumer-product business, seasonal stock purchases can require cash before the related sales generate it. The timing of customer payments shapes the seasonal stock-to-cash cycle for consumer businesses: sales to retailers on credit terms and payments from shoppers at checkout create different collection patterns.
ABL can offer fewer covenants than traditional loans. Collateral support gives a lender greater assurance about repayment, allowing less reliance on financial covenants. That can give a growing business more flexibility.
This flexibility is supported by continuing attention to the collateral. In ABL, reporting, appraisals, field examinations and collection arrangements can be part of that ongoing assurance. Their scope depends on the facility, so the operating arrangements matter alongside its size and repayment terms.
Track record
Asset-based financing examples
White Oak's financing examples show a range of facility structures and business sectors.
| Amount | Facility | Sector |
|---|---|---|
| $99.5m | Intl. ABL | Term Loan | Global Baby Products |
| £90m | FILO | Steel Production | Distribution |
| $25m | ABL Acquisition | e-Commerce | Women's Apparel |
| $50m | ABL | Media & Advertising Company |
“White Oak has been a pleasure to work with, and we're optimistic that our relationship will expand in the years ahead.”
White Oak Client
Get in touch
Discuss your asset-based financing needs
Talk with our team about what you need to fund, the assets in your business and the timing of your capital needs. Whether the priority is working capital, seasonal funding or an acquisition, these are useful starting points for a conversation about White Oak's asset-based lending solutions.
Jeremy Harrison
Managing Director - ABL & Invoice Finance, White Oak UK