This came in Thursday September 9, 2010:
Here is some information about our ABL product.
Some key points:
– Base solely on Accounts Receivable
– Non notification, however if one customer concentration higher than 25% we give the Client the option to let us notify so we can fund more on that one customer.
– Client must commit to a 1, 2, or 3 year contract. Committing to a longer contract helps the rate.
Prime + 2
Collateral Mgmt fee is between .35% – 1% depending on the deal itself.
Closing fee: 1-1.5% based on amount of line
Deposit @ $2500.00
I will keep in touch.
I’ve done business with Jan for more than eight years.
Asset Based Lending
One of our most popular financing programs is Asset Based Lending product, commonly referred to as “ABL”. Ideal for growth companies, asset-based revolving lines of credit combine the ease and convenience of a bank line of credit governed by a “borrowing base” with the flexibility and increased availability of asset-based lending.
If your company’s bank line of credit isn’t large enough to accommodate your growth and working capital needs, “ABL” – line of credit may be a good option for you.
The ABL revolving line of credit can provide you with immediate access to crucial working capital to grow and sustain your business. In addition, you’ll get Jan’s 25+ years of experience managing accounts receivable to work for you, allowing you to focus on doing what you do best…managing the operations and growth of your business.
Asset Based Revolving Lines of Credit are available for credit line sizes from $500,000 to $10,000,000.
When is Asset-Based Lending a Good Choice?
Expand Your Business While Increasing Profits
Are you turning down new sales because you lack the cash flow to purchase raw materials or pay your employees? ABL revolving lines of credit may provide you with the additional working capital you need to fuel your sales growth.
Manage Customer Credit
Do you know the tell-tale signs of a company about to file bankruptcy? How well do you really know the customers you are selling to? For that matter, how well do you know the prospects you are seeking to sell to? But monitoring customer credit risk requires expertise…and money. Subscriptions to the major credit reporting agencies can cost you well in excess of $100,000 a year. And a single credit manager employee can cost you an additional $75,000+ a year in wages, taxes and benefits.
As an ABL customer you’ll have access to over 25 years of unmatched credit expertise — at no cost to you. We’ll investigate the creditworthiness of your customers and prospects. And we’ll monitor that credit, track pay trends, and maintain individual credit limits for all of your important customers. So sleep well at night knowing your credit exposures are being continuously monitored.
Ever heard the collection industry phrase “The squeaky wheel gets the grease”? Experts agree that performing collection calls on your accounts receivable speeds up your receivable turnover and improves your cash flow. But hiring a staff to handle your collections is no easy task. A single collection employee can cost you in excess of $50,000 a year in wages, taxes and benefits. As an asset-based lending client, you’ll have unlimited access to a full staff of courteous and professional collection experts — all at no cost to you. And staying on top of your past due accounts receivable (“A/R”) ensures that your customers understand how serious you take your business. Studies prove that consistent and properly managed customer contact reduces your A/R days outstanding, improves customer satisfaction, and increases repeat business.
Rebalance Working Capital — Tie Short-Term Assets to Short-Term Debt
Just ask your accountant — borrowing long term to finance your short-term working capital needs is a bad idea. Longer term debt, like fully-amortizing term loans, is designed to finance longer term assets such as real estate and equipment. Shorter term assets, such as accounts receivable, require short term financing — like revolving lines of credit. So if you’re financing your short term working capital needs with a long term loan, an asset-based revolver can help you get things back in balance. It may even mean retiring some of the your long term debt to reduce your monthly payment burden.
Avoid Use of Personal Assets (Estate Protection)
Any investment expert will tell you that a business needs to “stand on its own” in order to be worthy of investment. But if you’re continually supporting your business with personal assets and funding, you’ll never achieve this. An asset-based revolving line of credit allows you to obtain financial support for your business on its own merit, using your accounts receivable as the principle source of repayment. But unlike traditional loans that are based on the creditworthiness of the borrower, asset-based revolving credit lines are based on the creditworthiness of your customers.
In general, companies turn to asset-based lending when a bank won’t approve a requested traditional line of credit. But that doesn’t mean ABL is the province of distressed firms. Quite the contrary, ABL lines of credit are generally for fast-growing, profitable companies. The ABL line is designed to allow a growing company to maintain higher debt-to-worth ratios (“financial leverage”) which are typically necessary during high-growth periods. The credit line size approved for a traditional bank line of credit is typically determined based on looking at sales and profitability for the last 2 to 3 years. But for a growing company, last year’s financing needs aren’t a good indicator of what a company needs this year. For these companies, ABL is hugely attractive. And, during a recession or periods of tight credit, when banks won’t lend to anyone, ABL lines of credit often become the financing of choice even for companies with stable sales and low financial leverage.
Qualification for the ABL revolving line of credit is fairly straightforward. The three most important factors are:
- You must have high-quality accounts receivable. Credit worthy customers are important, but so is diversification of accounts and invoice documentation.
- You must be able to produce monthly financial statements within 30 days of month-end. This is a crucial element of approval and imparts a level of reporting discipline on the customer.
- You must have a good management team in place. Startup businesses are fine, but there is always a premium placed on experience.
If these attributes describe your business, you have a good chance at obtaining approval for an asset-based revolving line of credit.
Ideal candidates for the ABL product include manufacturers, distributors and wholesalers, service-based businesses like staffing, transportation and printing companies. ABL lines are not available to consumer-based retailers, construction companies or health care providers.
The ABL line of credit is custom designed to meet the need of individual organizations, offering maximum flexibility and availability of funds.
Joseph P. Tufo, Certified Cash Flow Consultant, Certified Capital Specialist
CASH FLOW SPECIALISTS, INC.
P.O. Box 844
Alamo CA 94507
925-691-8200 Direct to my desk
Let Us Help You Get Funded:
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