ABL Loan for Business: Transform Assets into Working Capital | 7 Park Avenue Financial

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You Are Looking for ABL Lending Via a Non-bank Financing  Solution And Loan Facility!

The ABL FACILITY - A Business Line Of Credit That Works

UPDATED 08/18/2025

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ASSET  BASED LENDING CREDIT FACILITIES IN CANADA

Break Free from Cash Flow Constraints

Cash shortages paralyze business growth when you need capital most.

Traditional banks take weeks or months to approve loans, often rejecting applications based on credit history alone. Meanwhile, your inventory sits unsold, receivables remain uncollected, and competitors capture market share.

Let the 7 Park Avenue Financial team show you how ABL loans for business transform your existing assets into immediate working capital, bypassing traditional lending barriers for greater credit availability.

If you worry about securing long-term business financing, asset-based loans (ABL) may be the right alternative. ABL lending offers flexibility compared to traditional bank financing facilities.

Why Choose Asset-Based Lending?  

Many firms turn to ABL to unlock more financing. The word “alternative” captures its value in two ways.

First, ABL is alternative financing. The term gained traction after the 2008–2009 recession reshaped Canadian business financing. COVID-19 and the credit concerns of 2022 only reinforced its importance.

Second, “alternative” means choice. Businesses need options when it comes to financing.

Can you ignore asset-based financing while competitors embrace it? Yes, but ABL often ensures access to growth financing. Ignoring it may limit your future opportunities.

Tailored Asset-Based Financing

ABL credit facilities are customized to your needs, with fewer restrictions than traditional loans. Flexibility is built around borrowing power from your assets.

What assets are included? Common examples are:

• Accounts receivable

• Inventory

• Fixed assets or commercial real estate

• Patents or intellectual property (in some cases)

Can Your Company Benefit from ABL?

Yes. ABL monetizes assets at realistic values, usually through appraisals. This creates larger operating credit facilities than most bank loans.

If you’re a Canadian business owner or financial manager, ABL can protect your future growth. It avoids missed opportunities or reliance on equity financing.

Benefits of Asset-Based Lending  

Key advantages of ABL include:  

• Greater access to working capital than cash-flow loans

• Financing for firms rejected by banks

• Facilities that grow with sales and assets

• Fewer covenants, ratios, and personal guarantees

• Short-term bridge financing back to traditional lending

• Competitive rates based on asset quality and transaction size

Alternatives to ABL  

Companies sometimes compare ABL to other financing strategies. Options include:

• Cash-flow term loans

• Sub-debt or mezzanine financing

• Sale-leasebacks

• Equity financing

The appeal of ABL is maximizing asset value instead of borrowing against limited balance sheet strength.

ABL and Business Growth  

Many firms ask: “What’s in it for us?” The answer is simple. ABL increases cash flow by unlocking value from assets that sit idle.

Monthly reporting is usually required, but without restrictive covenants tied to ratios. This flexibility helps with seasonal needs and acquisitions.

The bottom line: ABL is a proven way to secure long-term working capital.Conclusion – Asset-Based Financing

Asset-based lending provides Canadian businesses with reliable financing alternatives. It delivers flexibility, growth potential, and fewer restrictions.

Case Study: The Benefits of ABL Loan for Business  

Company: Canadian wholesale food distributor

Challenge: Seasonal peaks required $2 million in additional inventory, but traditional banks declined due to rapid growth affecting debt-to-income ratios. Cash flow gaps during slow periods created supplier payment delays.

Solution: 7 Park Avenue Financial structured a $3 million ABL loan for business using inventory and receivables as collateral. The facility provided 80% advance rates on receivables and 50% on inventory, creating flexible access to working capital.

Results: Company  increased seasonal inventory capacity by 150%, improved supplier relationships through timely payments, and achieved 40% revenue growth within 18 months. The self-liquidating structure aligned payments with cash generation, eliminating cash flow stress.

Key Takeaways

• Asset valuation determines borrowing capacity - Understanding how lenders appraise different asset types provides the foundation for maximizing credit availability

• Advance rates vary by collateral quality - Receivables from creditworthy customers command higher advance rates than inventory or equipment

• Monitoring requirements ensure continued access - Regular reporting and asset verification maintain lender confidence and credit line availability

• Interest calculations differ from traditional loans - Daily balance calculations and usage-based fees require different cash flow planning approaches

• Collection procedures impact relationship dynamics - Notification versus non-notification structures affect customer relationships and operational flexibility  

Conclusion

7 Park Avenue Financial positions itself as Canada’s trusted expert in Asset-Based Financing (ABL), delivering tailored credit facilities that unlock working capital from receivables, inventory, equipment( fixed asset facility limits) , and real estate.

We help businesses overcome bank financing limitations ( traditional operating facility advances ) by structuring flexible, non-bank  Asset Based Lending ABL solutions that support growth, acquisitions, and turnaround strategies.

With deep expertise, credibility, and a client-first approach, 7 Park Avenue Financial ensures Canadian companies gain reliable access to capital when they need it most.

Speak with 7 Park Avenue Financial, a trusted Canadian financing advisor, to explore ABL solutions tailored to your business.

FAQ – Asset-Based Lending

What is an ABL credit facility?
An ABL facility is an asset-backed loan secured by receivables, inventory, equipment, or real estate. It usually functions as a revolving line of credit, giving more financing than traditional bank loans.

How does an ABL loan work?
ABL loans use balance sheet assets as collateral. Receivables and inventory make up the largest portion. Equipment and real estate may also be included. Small and mid-sized firms favor ABL for its simple borrowing process.

Are banks the best ABL lenders?
Canadian banks offer ABL with competitive rates, but entry requirements are high. Most bank ABL deals start at $5–10 million and require audits and due diligence. Many SMEs turn to non-bank lenders for more accessible solutions.

ABL Loan Statistics

• Asset-based lending volume in North America exceeds $400 billion annually
• ABL approval rates average 70-80% compared to 20-30% for traditional bank loans
• Businesses using ABL financing report 35% faster growth rates than those relying solely on traditional banking
• The average ABL loan size ranges from $100,000 to $10 million
• Invoice-to-cash cycles improve by 40-60% when using professional receivables management
• 85% of ABL borrowers renew their facilities, indicating high satisfaction rates

Citations

1. Canadian Federation of Independent Business. "Small Business Credit Conditions Survey." CFIB Publications, 2024. https://www.cfib-fcei.ca
2. Bank of Canada. "Business Outlook Survey: Credit Conditions Report." Bank of Canada Publishing, 2024. https://www.bankofcanada.ca
3. Commercial Finance Association. "Asset-Based Lending Market Analysis." CFA Research Division, 2024. https://www.cfa.com
4. Statistics Canada. "Quarterly Financial Statistics for Canadian Business Enterprises." Government of Canada, 2024. https://www.statcan.gc.ca
5. Industry Canada. "Small and Medium Enterprise Financing Report." Innovation, Science and Economic Development, 2024. https://www.ic.gc.ca
6. 7 Park Avenue Financial." Asset-Based Lending in Canada" https://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html