Using ABL for Business Expansion

Leveraging asset-based financing can provide the capital business owners need for business expansion (whether internally or to acquire a business). Advantages of asset-based financing in business expansion include:

  • Utilization of Existing Assets: Using existing assets (accounts receivable, inventory and equipment) to secure funding means that there’s no need to rely on external sources of funding or dilute ownership through equity financing.
  • Flexibility: Asset-based lenders provide financing based on the value of specific assets rather than on more strict creditworthiness criteria. This can be especially beneficial to businesses with fluctuating cash flow or those that are seasonal.
  • Fast Access to Capital: Since financing is secured by tangible assets, the approval process is typically faster compared to more traditional financing methods. This enables business owners to take advantage of expansion opportunities more quickly including expanding into new markets, bringing new products to market or acquiring competitors.
  • No Dilution of Equity: Business owners retain full ownership and control of the business.
  • Ability to Scale the Business: As the business expands and/or acquires more assets, it may become eligible for higher levels of financing which can lead to opportunities for additional expansion initiatives.
  • Promotes Better Asset Management: As asset-based lenders conduct regular assessments of the asset base, business owners learn discipline for better management of the assets being financed. This can result in improved operational efficiency and profitability over time.

 

Overall, asset-based financing offers businesses a practical and efficient means of securing capital while minimizing risk and preserving ownership.

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 mhafner@celticcapital.com, or visit us at www.celticcapital.com.