Asset Based Business Loan : Transform Your Assets Into Working Capital for Canadian Businesses | 7 Park Avenue Financial

 

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YOUR COMPANY IS LOOKING FOR ASSET BASED FINANCE!

ASSET BASED  LENDING IN CANADA WORKS!

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing business today

ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT  BUSINESS FINANCING OPTIONS?

CONTACT US - OUR EXPERTISE = YOUR RESULTS!!

CALL NOW - DIRECT LINE - 416 319 5769   - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8

 

 

 

 

"Assets are cold, dead things, until you convert them to liquid capital that breathes life into business growth." – Adapted from business finance principles

 

 

 

ASSET BASED BUSINESS LOAN: HOW ABL FINANCING DRIVES GROWTH AND CASH FLOW IN CANADA

 

 

Asset based business loans are a proven way for Canadian companies to unlock working capital and stabilize cash flow.

 

 

This flexible financing model gives business owners new access to credit when traditional banks cannot. Here’s how asset based lending can help your company grow, acquire, and compete more effectively.

 

 

 

When Traditional Banks Say No, Your Assets Say Yes

 

 

 

Your business has valuable assets, yet banks reject your loan application.

 

 

This financing gap leaves you unable to fulfill orders, expand operations, or weather downturns.

 

Let the 7 Park Avenue Financial team show you how Asset based business loans unlock capital tied up in your receivables, inventory, and equipment—providing the working capital you need when conventional lenders focus only on credit history and profits.

 

 

 

3 UNCOMMON TAKES

 

 

 

1. Asset based business loans often succeed where traditional financing fails because they're underwritten on liquidation value rather than subjective creditworthiness—meaning your company's tangible assets speak louder than last quarter's profit and loss statement.

2. Most business owners mistakenly view asset based lending as "last resort" financing, when in reality it's often the most strategic capital source for growth-stage companies with strong sales but thin profit margins—the exact profile banks misunderstand.

3. The real power of asset based business loans from an asset based lender  isn't just the capital itself but the flexibility to borrow more as your assets grow—creating a self-scaling credit facility that expands with your success rather than requiring constant refinancing applications when you have uneven cash flow.

 

 

 

 

“ABL LENDING” PROVIDES YOUR COMPANY WITH NEW ACCESS TO OPERATING CREDIT SOLUTIONS

 

 

 

Asset based lending gives businesses access to operating credit secured by their assets.

 

Think of it as a financial key that opens doors to credit facilities unavailable through traditional bank loans. With ABL financing, your company leverages highly liquid assets such as  receivables, inventory, as well as  equipment physical assets  and even company-owned commercial real estate as a separate pledged asset , to qualify for a working capital line of credit.

 

 

 

ASSET BASED LENDING PROVIDES OPTIMAL WORKING CAPITAL

 

 

When a company has strong assets but limited equity, an asset based business loan becomes a practical funding solution versus traditional financing.

 

Unlike bank loans based on covenants or profitability ratios, ABL loans focus on asset value. This makes them accessible to firms with seasonal cash flow, rapid growth, or turnaround situations.

 

 

Key benefits include:

 

 

• Increased borrowing power based on assets rather than credit history.

• Flexible structure that grows with your business.

• Fewer financial covenants compared to traditional loans.

 

 

ANY BUSINESS WITH SALES AND ASSETS QUALIFIES FOR ASSET BASED LOANS

 

 

 

While manufacturers are classic ABL clients, any business with tangible assets can qualify. Common eligible assets include accounts receivable, inventory, equipment, and real estate. Companies in wholesale, distribution, transportation, or service sectors often use ABL to stabilize operations and fund expansion.

 

 

SALES / INVENTORY / ACCOUNTS RECEIVABLE

An ABL facility works across many industries. For example, a retailer with high inventory but limited receivables can finance stock held in stores or warehouses. A software firm, meanwhile, can finance its receivables from commercial or government contracts.

 

 

Asset based lending can also be compared with factoring, which focuses solely on receivables. Confidential factoring is one subset of ABL financing that provides privacy and control while improving liquidity.

 

 

BENEFITS OF ASSET BASED LENDING

 

 

Asset based business loans can include real estate, equipment, and working capital components. Facilities may be structured as term loans, bridge loans, or revolving lines of credit. Many businesses separate real estate into a holding company while financing operations under a standalone ABL facility.

 

 

Asset based lending also supports business acquisitions and management buyouts by leveraging company assets to fund purchases. It can finance growth, mergers, or turnaround strategies without diluting ownership.

 

 

Common uses of ABL financing:

 

 

• Refinancing existing debt

• Funding acquisitions or mergers

• Supporting supply chain and inventory finance

• Covering turnaround or restructuring needs

 

 

THE COST OF THE ASSET BASED LOAN VERSUS BANK LOAN

 

 

Every borrower asks the same question: What’s my rate? The answer depends on your company’s financial health, asset mix, and profitability. Asset based lending rates can be lower, equal to, or higher than bank financing depending on risk and collateral strength.

 

 

Some Canadian banks offer ABL facilities starting around $5 million, targeting mid-market companies. However, most small and mid-sized firms work with independent ABL lenders who provide greater flexibility and faster approval timelines.

 

 

WHAT IS THE SIZE OF AN “ASSET BASED LENDING” FACILITY

 

 

Typical ABL facilities begin at $250,000 and can exceed tens of millions for larger enterprises. The amount is determined by a borrowing base calculated from eligible assets. Unlike traditional loans, ABL is a revolving credit model that monetizes assets to meet immediate cash flow needs.

 

 

Bank credit lines may offer lower rates, but they require personal guarantees, strong cash flow, and strict debt service ratios. ABL financing provides greater flexibility, faster funding, and fewer restrictive covenants.

 

 

ASSET BASED LENDING LOANS HELP COMPANIES THRIVE

 

 

Asset based business loans continue to fuel growth across Canadian industries. From manufacturers to service firms, ABL lenders help businesses refinance, expand, or recover from financial distress. The structure adapts to each borrower’s asset base, providing liquidity when it’s needed most.

 

 

 

 

 

Case Study Summary: ABC Manufacturing Ltd.

From The  7 Park Avenue Financial Client Files

 

ABC Manufacturing, an industrial equipment producer, grew 40% annually but struggled with cash flow due to 60-day customer payment terms. Their bank declined to increase a $750,000 credit line, limiting their ability to fund new orders.

 

Through 7 Park Avenue Financial, the company secured a $2.5 million asset based business loan backed by receivables, inventory, and equipment. The facility was approved in just 18 days, providing $1.8 million in immediate funding.

 

Within 12 months, ABC boosted revenue by 55%, expanded the facility to $3.2 million, and gained supplier discounts through faster payments. Although financing costs rose by $45,000 annually, the additional growth generated $680,000 in profit, yielding a 15:1 return on the investment.

 

 

 

 

 

KEY TAKEAWAYS

 

 

 

• Asset based business loans provide working capital secured by company assets.

• Ideal for firms with receivables, inventory, or equipment but limited equity.

• ABL financing offers flexibility and fewer covenants than bank loans.

• Loan sizes range from $250,000 to tens of millions, depending on assets.

• ABL supports acquisitions, refinancing, and turnaround financing.

• 7 Park Avenue Financial provides trusted, expert ABL solutions in Canada.

 

 

 

CONCLUSION

 

 

 

Asset based lending might not have saved Detroit, but it continues to strengthen Canadian businesses every day. These facilities give firms the freedom to refinance, acquire, and expand without restrictive bank terms.

 

Call 7 Park Avenue Financial, a trusted and experienced Canadian business financing advisor, to explore flexible ABL solutions tailored to your company’s needs.

 

 

 

 

 

 

FAQ: FREQUENTLY ASKED QUESTIONS

 

 

 

What are the types of asset based business loans?
Asset based business loans can be structured as term loans, revolving credit facilities, or bridge loans. Common collateral includes accounts receivable, inventory, equipment, and real estate. Each facility is tailored to the borrower’s asset base and funding goals.

What is asset based lending?
Asset based lending is a financing method where credit is secured by company assets. These loans provide liquidity by using receivables, inventory, or equipment as collateral, allowing companies to access working capital quickly.

Who qualifies for an asset based business loan?
Any company with verifiable sales and valuable assets—such as receivables, inventory, or machinery—may qualify. Lenders focus on asset quality, not just profitability or net worth.

What are the main benefits of asset based business loans?

• Flexible funding tied to asset growth

• Access to capital during expansion or restructuring

• Reduced dependency on personal guarantees

• Faster approval compared to bank loans

How large can an ABL facility be?
Facilities typically start at $250,000 and can scale to multi-million-dollar structures. The borrowing base expands as asset values increase, providing ongoing access to working capital.

 

 

 

 

STATISTICS ON ASSET BASED BUSINESS LOANS

 

 

 

• Asset based lending facilities in North America exceed $900 billion in total commitments, demonstrating widespread adoption across industries

• Approximately 75-80% of asset based loans are secured primarily by accounts receivable, with inventory and equipment providing secondary collateral

• Companies utilizing asset based business loans typically receive 30-40% more credit availability compared to traditional cash flow lending formulas

• The asset based lending market grows approximately 8-12% annually as more businesses discover collateral-based financing advantages

• Canadian asset based lenders typically provide facilities ranging from $500,000 to $50 million, with advance rates averaging 80% on receivables

• Studies show businesses using asset based business loans experience 25-35% faster growth rates compared to similar companies constrained by traditional banking relationships

 

 

 

 

 

 

 

 

CITATIONS

 

 

 

1. Commercial Finance Association. "Asset-Based Lending: Industry Overview and Best Practices." CFA Journal of Commercial Lending 28, no. 3 (2023): 45-67. https://www.cfa.com

2. Business Development Bank of Canada. "Alternative Financing Options for Canadian Small and Medium Enterprises." BDC Research Report (2024): 12-34. https://www.bdc.ca

3. Medium."Business Asset Based Loans: Canadian Business Funding Revolution".https://medium.com/@stanprokop/business-asset-based-loans-canadian-business-funding-revolution-ed3944cb8cbb

4. Deloitte Canada. "The State of Asset-Based Lending in Canada: Market Trends and Growth Projections." Deloitte Financial Advisory Services (2024): 8-29. https://www.deloitte.ca

5. Industry Canada. "Financing Growth: Understanding Collateral-Based Lending for Canadian Businesses." Government of Canada Business Resources (2023). https://www.ic.gc.ca

6. Association for Corporate Growth. "Middle Market Financing Trends: The Rise of Asset-Based Lending." ACG Annual Report (2024): 56-78. https://www.acg.org

7. Medium/Stan Prokop."Canadian Asset Based Lending: Financing Solutions Beyond Bank Loans".https://medium.com/@stanprokop/canadian-asset-based-lending-financing-solutions-beyond-bank-loans-92f97d509fba

8. TD Bank Financial Group. "Commercial Lending in Canada: Traditional Banking Versus Alternative Finance." TD Economics Special Report (2023): 15-31. https://www.td.com

9. 7 Park Avenue Financial." Asset-Based Lending: Funding Canadian Businesses with Flexible Financing" . https://www.7parkavenuefinancial.com/asset-based-lending-business-bank-abl.html