Business Asset Based Loans: Fast Capital for Canadian Businesses | 7 Park Avenue Financial

You Are Looking for  Asset Based Lending! 

UPDATED 08/19/2025

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

        Financing & Cash flow are the biggest issues facing business today

               Unaware / Dissatisfied with your 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

At 7 Park Avenue Financial, we specialize in unlocking working capital through tailored asset based loan solutions. Whether your business needs growth financing, turnaround support, or improved cash flow, our expertise ensures flexible funding built around your assets—not restrictive bank covenants under their traditional operating facility advances.

When Traditional Financing Fails Your Growing Business

Your business assets are worth more than their book value—they're your ticket to immediate capital.

Traditional lenders focus on perfect credit and lengthy approval processes, leaving profitable businesses stranded when opportunities arise.

Let the 7 Park Avenue Financial team show you how Business asset based loans bypass these barriers, transforming your inventory, and physical assets like equipment and receivables that are in effect liquid assets,  into working capital within days, not months. That's financial performance via sales and asset lending values.

Is Asset-Based Lending the Right Fit?

It may seem odd that the same financing tool used to restructure a company in trouble can also fund growth. That tool is asset-based lending (ABL SOLUTIONS).

ABL is not a traditional loan. Instead, it is a specialized financing facility offered by unique lenders in the Canadian marketplace. These lenders stand apart from banks and unsecured loans  in how they evaluate and structure credit around a company's cash flow via valuable assets and sales revenues.

How Does ABL Financing Work?

ABL financing allows you to monetize business assets to create cash flow. It is most comparable to a Canadian chartered bank line of credit.

However, the two are very different in structure and flexibility.

ABL lenders advance funds against assets such as accounts receivable, inventory, equipment ( via fixed asset facility limited , or real estate.   That is why businesses choose asset based lending.

The focus is entirely on the value of your assets—not on strict covenants, financial ratios, or outside guarantees, as banks often require.

Why Is ABL Different from Bank Financing?

Bank operating lines are capped at predetermined limits. They are heavily tied to leverage, tangible net worth, and equity requirements. ABL, on the other hand, grows with your asset base  - that is growth finance funding.

That means as you generate receivables and increase inventory, your borrowing power increases automatically. Your business gains access to working capital that scales with sales.

Key Benefits of ABL Financing

ABL financing lets you draw funds daily against eligible assets. This matches the natural rhythm of your company’s inflows and outflows. It supports:

• Seasonal cash flow needs

• Large new contracts

• Slow collection periods

• Growth-driven working capital demands

In effect, ABL turns your company into a cash flow engine by aligning financing directly with your asset base.

Setting Up an ABL Facility

When choosing the right ABL lender, consider:

• Facility size and borrowing limits

• Information requirements, such as appraisals and operating audits

• Timeline for setup, typically two to seven weeks

• Costs and reporting obligations, including monitoring requirements

Like a bank line, ABL uses borrowing base certificates for ongoing reporting, but with greater flexibility tied directly to asset values.

ABL Usage in Canada vs. the U.S.

In the United States, almost 30% of firms use ABL financing in some form. While adoption in Canada is lower, more companies are exploring ABL as a reliable solution to cash flow challenges.

Case Study

Company: Manufacturer- Winnipeg

Challenge: This metal fabrication company needed $500,000 to fulfill a large government contract but their bank credit line was maxed out and traditional loan approval would take 60 days.

Solution: 7 Park Avenue Financial arranged a business asset based loan using their equipment and accounts receivable as collateral, providing $450,000 within 8 days.

Results: Company secured the contract, increased annual revenue by 35%, and established ongoing asset-based credit facility for future opportunities.

Key Takeaways

• Asset valuation determines borrowing capacity - Understanding how lenders appraise your collateral directly impacts available credit
• Advance rates vary by asset type - Different assets qualify for different percentages of their appraised value
• Revolving credit adjusts with asset values - Your available credit increases or decreases based on collateral fluctuations
• Speed advantage over traditional financing - Asset-based loans approve and fund significantly faster than bank loans
• Flexible qualification requirements - Credit history matters less than asset quality and value

CONCLUSION:  Is ABL Right for You?

Asset-based lending is not better or worse than bank financing—it’s different. For many companies, it maximizes available financing while providing flexibility to handle both challenges and growth.

To determine if ABL fits your situation, call  7 Park Avenue Financial, a trusted Canadian business financing advisor. Exploring this option may be the key to unlocking the working capital your business needs.

FAQ

What types of assets qualify for business asset based loans? Business asset based loans typically accept inventory, accounts receivable, equipment, machinery, real estate, and even intellectual property as collateral. Lenders evaluate assets based on liquidation value and marketability.

How quickly can I access funds through asset-based lending? Business asset based loan approval and funding can occur within 5-10 business days, significantly faster than traditional bank loans that often require 30-90 days for processing and approval.

What percentage of my asset value can I borrow against? Business asset based loan advance rates typically range from 60-85% of asset value, depending on the asset type. Accounts receivable may qualify for 80-85%, while inventory might qualify for 60-70%.

Do I need perfect credit for an asset-based loan? Business asset based loans focus primarily on asset value rather than credit scores, making them accessible to businesses with challenged credit histories or limited operating history.

What industries benefit most from asset-based lending? Business asset based loans serve manufacturing, wholesale, retail, construction, healthcare, and professional services particularly well, especially businesses with significant inventory or receivables.

Who qualifies for business asset based loans? Business asset based loan qualification depends primarily on asset quality and value rather than credit scores, making them available to established businesses with valuable collateral.

What assets can secure business financing? Business asset based loans accept various collateral including inventory, equipment, accounts receivable, real estate, and marketable securities as security for funding.

When should businesses consider asset-based lending? Business asset based loans work best for seasonal businesses, rapid growth situations, acquisition financing, or when traditional bank credit lines prove insufficient.

Where can Canadian businesses find asset-based lenders? Business asset based loan providers include specialized finance companies, alternative lenders, and some traditional banks offering asset-based lending divisions.

Why choose asset-based loans over traditional financing? Business asset based loans offer faster approval, higher borrowing limits, flexible terms, and accessibility for businesses that don't meet traditional lending criteria.

How do asset-based loan rates compare to bank loans? Business asset based loan rates typically range 2-8% above prime, reflecting the expedited approval process and flexible qualification requirements.

What documentation is required for asset-based lending? Business asset based loans require asset appraisals, financial statements, accounts receivable aging, inventory reports, and business registration documents.

Can startups access asset-based financing? Business asset based loans are available to startups with substantial assets, though established businesses typically receive better terms and higher advance rates.

How do asset-based credit lines work? Business asset based loan facilities provide revolving credit based on eligible asset values, allowing businesses to borrow and repay as needed.

What are the risks of asset-based lending? Business asset based loans require asset monitoring, may include personal guarantees, and could result in asset liquidation if payment defaults occur.

How do business asset based loans improve cash flow? Business asset based loans convert illiquid assets into immediate working capital, allowing businesses to meet payroll, purchase inventory, and capitalize on growth opportunities without waiting for customer payments.

What competitive advantages do asset-based loans provide? Business asset based loans enable businesses to accept larger orders, offer better payment terms to customers, negotiate supplier discounts, and respond quickly to market opportunities.

How flexible are asset-based lending terms? Business asset based loans offer revolving credit lines that adjust with asset values, interest-only payment options, and customizable repayment schedules aligned with business cycles.

Can asset-based loans help businesses during economic downturns? Business asset based loans provide stability during challenging periods by maintaining credit availability even when cash flow decreases, helping businesses survive temporary setbacks.

What growth opportunities do asset-based loans unlock? Business asset based loans enable acquisition financing, international expansion, new product launches, and seasonal inventory buildup that traditional financing might not support.

Is asset-based lending the same as secured lending? Business asset based loans represent a specialized form of secured lending where the loan amount directly correlates to asset values, with ongoing monitoring and adjustment of credit limits.

Do I lose control of my assets with asset-based financing? Business asset based loans allow you to maintain operational control of your assets while using them as collateral, though lenders may require regular reporting and monitoring.

Can I combine asset-based loans with other financing? Business asset based loans can complement existing financing arrangements, though coordination with other lenders is essential to avoid conflicting security interests.

What happens if my asset values decrease? Business asset based loan facilities may require additional collateral or loan reduction if asset values decline significantly below required thresholds.

How does asset-based lending affect my business credit? Business asset based loans can improve your credit profile through positive payment history and may provide access to larger credit facilities than unsecured alternatives.

What makes asset-based lending different from traditional business loans? Business asset based loans evaluate your collateral value first, then your ability to service debt, while traditional loans prioritize cash flow and credit history before considering collateral.

How do lenders determine asset values for lending purposes? Business asset based loan valuations use professional appraisals, liquidation value assessments, and ongoing monitoring to establish and maintain appropriate lending ratios.

What ongoing obligations come with asset-based financing? Business asset based loans require regular financial reporting, asset monitoring, insurance maintenance, and compliance with borrowing base certificates and covenant requirements.

Statistics

• 73% of Canadian small businesses report difficulty accessing traditional bank financing
• Asset-based loans can provide 60-85% of asset value as available credit
• Approval times average 5-10 business days versus 30-90 days for traditional loans
• Asset-based lending market in Canada has grown 15% annually over the past five years
• Businesses using asset-based financing report 23% faster growth rates than those relying solely on traditional financing

Citations

1. Canadian Bankers Association. "Commercial Lending Trends in Canada." CBA Annual Report, 2023. https://www.cba.ca
2. Statistics Canada. "Business Financing Survey Results." Government of Canada, 2023. https://www.statcan.gc.ca
3. Business Development Bank of Canada. "Alternative Financing Options for SMEs." BDC Research, 2023. https://www.bdc.ca
4. Industry Canada. "Access to Capital for Canadian Businesses." Innovation, Science and Economic Development, 2023. https://www.ic.gc.ca
5. 7 Park Avenue Financial ."Asset-Based Lending in Canada" . https://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html