Asset-based lending (ABL) differs from traditional bank financing in its focus on the quality of the underlying collateral, rather than relying solely on a business’s creditworthiness. While banks prioritize the financial health and credit profile of a business, ABL lenders evaluate the value and performance of tangible assets. This flexibility allows asset-based lenders to offer solutions to businesses that may be considered too risky for conventional banks, making ABL an attractive option for many companies in need of financing.
