Invoice & debtor finance · asset-based lending
Your inventory and receivables, working as collateral.
A revolving facility secured against your business assets, primarily inventory and accounts receivable. Higher facility limits than pure invoice finance, more flexibility than term lending. Suits asset-heavy businesses with consistent operating patterns.
What it is, when it fits
Plain English, with the trade-offs.
Asset-based lending (ABL) is a revolving facility secured against a borrowing-base of business assets, typically receivables and inventory. The lender advances a percentage of eligible receivables (usually 80% to 85%) plus a percentage of eligible inventory (usually 50% to 70%), with the limit recalculated monthly based on current borrowing-base reporting. ABL fills the gap between invoice finance (receivables only, smaller scale) and term lending (fixed amount, fixed schedule). It suits asset-heavy businesses with $5M+ in inventory or receivables, predictable trading patterns, and the operational maturity to produce monthly borrowing-base reports. Pricing is BBSY-linked (currently BBSY + 2% to 5%) and facility sizes run from $1M to $50M+. ABL deals carry covenants (financial ratios, reporting standards, audit rights) and require regular field exams of inventory. The structural complexity is meaningful; ABL only makes sense at sufficient scale to amortise the operational overhead.
Manufacturer at a CNC machine in an Australian factory.
Typical scenarios
Manufacturer with $5M+ in inventory
Why: Working capital tied in inventory; growth requires funding it more cheaply.
Outcome: $3M ABL facility against inventory + receivables, materially cheaper than equivalent unsecured.
Importer/distributor scaling international supply chain
Why: Long lead times tie capital in goods-in-transit and warehoused inventory.
Outcome: $8M ABL with goods-in-transit cover and receivables advance.
Wholesaler funding growth without diluting equity
Why: Profitable but capital-light; growth needs working capital.
Outcome: $5M ABL replaces a series of stacked working-capital products at lower cost.
Established retailer optimising buying power
Why: Wants supplier discounts on early payment; inventory turns predictable.
Outcome: $4M ABL against inventory funds early-payment discounts that more than cover finance cost.
Lenders for this product
Who we work with.
- Scottish Pacific
- NAB Business
- Westpac Business
- Tradeplus24
Lender accreditation varies; not every lender is available for every deal. We pick from the panel based on your specific situation.
How it works
From brief to settlement.
- 01
Borrowing-base assessment
We model the eligible borrowing base (receivables aged and concentrated, inventory categorised) before approaching lenders. Facility sizing depends entirely on this analysis.
- 02
Covenant negotiation
ABL deals live and die on covenants. We engage early on what your business can sustainably commit to, not what looks pretty on day one.
- 03
Field exam and onboarding
Lender field exams take 2 to 4 weeks. Documentation runs in parallel. Total typical timeline 8 to 12 weeks from initial approach to first draw.
- 04
Live operation and review
Monthly borrowing-base reporting establishes the rhythm. We support facility-level renegotiation at year-end and during growth phases.
Indicative pricing & terms
Ranges, not promises.
Rate range
BBSY + 2 to 5%
Loan size
$1M to $50M+ facility
Term
Ongoing facility, typical 24 to 36 month commitment
Security
First charge over inventory and receivables; usually a personal guarantee from directors
Indicative only; specific pricing depends on lender, security, and your business profile.
Frequently asked
Honest answers, plain English.
Difference from invoice finance?
Invoice finance funds against receivables only. ABL adds inventory (and sometimes other current assets) to the borrowing base. ABL facility sizes are larger and the structure carries more covenants and reporting requirements.
Inventory advance rates?
Typically 50% to 70% of cost value for finished goods, lower for work-in-progress, lowest (or excluded) for raw materials and goods in transit. Rates depend on liquidity of the underlying inventory category.
Reporting requirements?
Monthly borrowing-base reporting (current receivables and inventory aged) is standard. Quarterly management accounts and annual audited statements are usually required. Regular field exams (often annual) verify inventory and AR systems.
Personal guarantees?
Almost always for facilities up to ~$10M. Above that, lenders sometimes accept a corporate guarantee from a parent or a more limited director guarantee. Specifics negotiated deal by deal.
Covenant requirements?
Typical covenants: minimum tangible net worth, debt service coverage ratio, fixed charge coverage ratio, sometimes EBITDA-based ratios. Breach triggers a review rather than automatic acceleration; we help renegotiate covenants where the underlying business is healthy.
Audit and field exam costs?
Annual field exams typically cost $5K to $15K, usually paid by the borrower. Audit fees on top depending on whether the borrower already has audited statements. These costs are real and need to be modelled into total facility cost.
Related products
If this isn't quite the fit.
Next step
Twenty minutes, no obligation.
Tell us the shape of the deal and the timing. We'll send a lender shortlist for asset-based lending or, if it isn't the right fit, an honest signal of what is.