What Asset Based Lenders (ABL) Look for Besides Collateral
Business owners often ask what lenders want in their relationships with borrowers. For Celtic Capital, it’s two things:
- Good Communication
- Timely and accurate reporting
Good communication because lenders need to understand what’s going on with the business – any challenges it’s facing and any reporting issues that are causing anxiety. We can’t make things better if we don’t know what’s wrong. Don’t be afraid to call your lender and talk things over before any issue becomes too large to easily fix.
It’s equally important that borrowers understand what and when to report to the lender. You don’t want your lender chasing you for information. Borrowers who are habitually late in reporting can be charged fees which can set the tone for how the lender views you. It tells the lender a great deal about how you run your business – if there’s a problem with reporting, lenders usually see problems with how the business is managed in general.
On the flip side, borrowers in good favor with their lenders do well when asking for a favor (e.g., an over-advance). They’re more apt to hear “yes” and not “why should I bother?”
ABL reporting is a discipline and it’s different from what banks require. And while it may be more than what you’re used to, remember: you were asked out of your bank for a reason. ABL can get you back.
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.