Some Basic Differences Between ABL & Factoring

When you need to find an alternative to bank financing for your business, you have options, the most common being asset based lending (ABL) and factoring. Understanding some of the basic differences is essential to make the best decision for your business.

Typically, ABL is less expensive, has less reporting, and is less intrusive for your customers. Factors notify your customers; ABL does not. Factors pick and choose which of your customers to submit; ABL want all because ABL pools all of your assets enabling you to borrow everything that’s available to you.

There are operational differences between ABL and factoring as well including the quickness each funds and where customer payments are sent. ABL doesn’t use a lockbox, so all payments go directly to you; with factoring, they do not.

Because there are significant differences between ABL and factoring that will impact your business, do your homework before you make any decision. It will pay off in the end.

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.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or, or visit us at