Referring Clients to the Right ABL
As a referral source, especially a bank looking to exit a deal, it’s extremely important to have confidence in the asset based lender to whom you refer. It’s always best to refer to a lender you’ve worked with before or to one for whom you’ve received a strong recommendation from someone you trust.
You’re looking for a source that acts quickly, delivers on proposals, and doesn’t bait and switch. You need to weigh what your borrower needs and whether or not a particular lender can, and will, step up to the task.
When you refer someone, it’s usually to a salesperson or credit person, not necessarily the decision-maker. Many lenders get decision-makers involved from the get-go so that any proposals they make are fleshed out internally before they go to the borrower. This is the process you want because it will speed the deal along.
When you make your referral, ask about the lender’s process. How long until a proposal will be issued? Usually what kills a deal is that source and use doesn’t work or there’s a cash flow issue going forward. Good ABLs get a sense of that up front when they look at losses and how payables are running. This can be done fairly easily and doesn’t need weeks of due diligence just to generate a proposal.
And what’s the process once the proposal is signed? Borrowers with time sensitivity need quicker turnaround and you might, too.
The bottom line is that your recommendation to a borrower is a reflection of you; and that really says it all because the ultimate goal is to get the borrower back to you when the time is right.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.