YOUR COMPANY IS LOOKING FOR AN ABL ASSET BASED LINE OF CREDIT!
Discover the Power of Asset based Loans / ABL Asset-Based Credit Lines!
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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"Assets put money in your pocket. Liabilities take money out of your pocket." — Robert Kiyosaki
Table of Contents
Why ABL Asset-Based Credit Lines Are the Future
Introduction
The Revolving Business Line of Credit
ABL vs. Canadian Chartered Bank Lines of Credit
Industries That Use ABL Financing
Why Change Your Working Capital Structure?
Flexible Facility Sizes
Maximizing Liquidity Through ABL
Unlocking Business Potential With ABL Financing
Conclusion
Frequently Asked Questions (FAQ)
Introduction
When Your Assets Are Worth More Than Your Credit Score
Your business owns substantial inventory and receivables worth hundreds of thousands, yet banks, via traditional loans, keep declining your financing applications based on last year's losses , your company's financial statements ,uneven cash flow, or thin margins.
You watch opportunities slip away while your assets sit idle, generating no liquidity.
Let the 7 Park Avenue Financial team show you how an ABL asset based credit line solves this by lending against what you actually own - helping you manage cash flow —not arbitrary credit metrics—turning your balance sheet into immediate working capital without selling equity or assets.
3 UNCOMMON TAKES ON ABL ASSET BASED CREDIT LINES
1. ABL Works Best When Your Business Looks "Messy" on Paper
Most business owners think they need perfect financials before approaching any lender. The truth? ABL asset based credit lines often make the most sense when your financial statements look chaotic—rapid growth straining cash flow, recent losses from expansion, seasonal volatility that scares traditional lenders. Your assets tell a clearer story than your P&L, and that's precisely when asset based lending shines.
2. The Real Cost Isn't the Rate—It's the Opportunity You're Missing
Everyone fixates on whether ABL rates run 2-3 points higher than bank rates. But here's what matters more: What revenue are you losing by not having working capital to fulfill large orders? What supplier discounts are you missing? What clients are you turning away? The business owner who secures an ABL facility at 9% and grows revenue by 30% comes out ahead of the one who waits for a 6% bank approval that never arrives.
3. ABL Can Replace Your Bank Before Your Bank Replaces You
Most businesses wait until their bank cuts them off before exploring ABL. Savvy operators flip this dynamic—they establish an asset based credit line while still bankable, creating leverage and options. When your bank knows you have alternatives, suddenly you're not a supplicant, you're a client with choices. And if they do tighten terms, you're already positioned with working capital that grows automatically as your eligible assets increase.
Asset-based lending (ABL) has become a powerful financing solution for Canadian businesses seeking improved liquidity and flexibility. It allows companies to leverage existing assets and sales to unlock working capital.
Many Canadian businesses ask whether an ABL asset-based line of credit could meet all their financing needs. In practice, ABL often forms the foundation of a broader, highly effective funding strategy.
The Revolving Business Line of Credit
An ABL asset-based credit line is designed to revolve. As receivables turn into cash, availability replenishes automatically.
The facility is secured by sales and sufficient assets, including borrowing capacity against :
Accounts receivable
Inventory
Equipment
Sometimes real estate loans / intellectual property
These pledged assets form the borrowing base, which determines credit availability. True ABL facilities are non-notification, meaning customers and suppliers are unaware of the financing.
ABL Versus Canadian Chartered Bank Lines of Credit
Many first-time ABL users ask how this differs from a traditional bank line of credit. The most important difference is liquidity.
ABL typically provides:
Higher advance rates
Greater cash flow access
Fewer profitability constraints
Many ABL borrowers would not qualify for bank financing at all. Others qualify but are restricted by conservative bank credit limits.
Industries That Use ABL Financing
ABL financing serves a broad spectrum of Canadian businesses. It is commonly used in:
Wholesale distribution
Retail
Manufacturing
Nearly every asset-intensive industry in Canada can benefit from asset-based lending. Revenue size is less important than asset quality and turnover.
Why Change Your Working Capital Structure?
Most Canadian ABL users turn to asset-based credit because they are constrained by bank lending limits. Their growth is capped by fixed ratios and conservative underwriting.
Some of Canada’s largest corporations, including public companies with billions in revenue, have replaced bank lines with ABL facilities. ABL scales efficiently regardless of company size or ownership structure.
Flexible Facility Sizes
Entry-level ABL facilities typically begin around $250,000. There is no practical upper limit.
Facilities can scale into the tens or hundreds of millions as asset levels grow. This makes ABL ideal for expansion-stage and acquisitive businesses.
Maximizing Liquidity Through ABL
ABL maximizes liquidity through ongoing collateral monitoring and reporting. Typical advance rates include:
Up to 90% of eligible accounts receivable
30–70% of eligible inventory
Market-based values for equipment and real estate
Many companies experience a 50%–100% increase in available cash flow. This improvement often occurs immediately after transition.
Unlocking Business Potential With ABL Financing
ABL asset-based credit lines unlock the hidden value within a company’s balance sheet. They provide funding for growth, acquisitions, and operational efficiency.
By moving beyond traditional bank constraints, businesses gain financial flexibility. This flexibility supports sustainable growth and long-term competitiveness.
Case Study Summary: ABL Asset-Based Credit Line Success
Company: ABC Industrial Distribution Ltd.
Industry: Industrial Equipment & Supplies
Location: Ontario, Canada
Challenge
Despite growing revenue from $8 million to $14 million, ABC Industrial Distribution was constrained by a $1.5 million bank line that had not increased in five years. The fixed limit restricted inventory purchases, forced the company to decline large orders, and eliminated cash flow flexibility.
Solution
Working with 7 Park Avenue Financial, the company replaced its bank line with a $3.5 million ABL asset-based credit line. The facility advanced against receivables and inventory, allowing availability to scale directly with asset growth.
Results
Within 12 months, revenue increased to $19.2 million. The company accepted larger orders, added new customers on extended terms, captured supplier discounts, and improved operating margins. Credit availability expanded automatically to $4.8 million, with no re-approval required.
Outcome
ABL financing removed growth constraints, improved cash flow, and delivered scalable liquidity aligned with the company’s balance sheet.
Key Takeaways
ABL financing is secured by receivables, inventory, and equipment
Borrowing base drives credit availability, not net worth
ABL delivers significantly more liquidity than bank lines
Most Canadian industries can access ABL financing
Facility sizes scale from $250K to multi-million-dollar levels
Advance rates can reach 90% of receivables
ABL supports growth, acquisitions, and working capital needs
Conclusion
ABL asset-based credit lines offer a compelling alternative to traditional Canadian bank financing. They provide higher liquidity, broader eligibility, and scalable funding.
For many businesses, ABL truly functions as a one-size-fits-most solution. The results consistently support that conclusion.
For expert guidance, contact 7 Park Avenue Financial, a trusted and experienced Canadian business financing advisor specializing in asset-based credit lines.
Frequently Asked Questions (FAQ)
What is ABL asset-based financing?
ABL is a financing solution secured by business assets such as receivables, inventory, and equipment to improve liquidity.
How does ABL differ from bank financing?
ABL provides higher advance rates and greater access to cash flow. It is available to businesses that banks may decline or restrict.
Is ABL industry-specific?
No. ABL supports a wide range of industries, including distribution, manufacturing, and retail.
What are typical ABL facility sizes?
Facilities often start at $250,000 and have no upper limit.
How does ABL maximize liquidity?
Liquidity is optimized through collateral monitoring and dynamic borrowing base calculations.
How do I apply for ABL financing?
You can work with an ABL lender or advisor such as 7 Park Avenue Financial, who will manage the process.
What assets qualify as collateral?
Common assets include accounts receivable, inventory, equipment, and sometimes real estate.
Is ABL available to startups?
ABL typically favors established businesses, but some startups with strong receivables may qualify.
Are there risks with ABL financing?
As with any financing, risks exist. Proper structure and professional guidance mitigate those risks.
STATISTICS - ABL ASSET BASED CREDIT LINES
Market size: The North American asset based lending market exceeded $800 billion in outstanding commitments as of 2024, with approximately $75-100 billion in Canada.
Advance rates: Typical ABL facilities advance 80-85% against eligible receivables and 50-65% against eligible inventory, providing substantially more liquidity than traditional bank lending formulas.
Growth rates: Asset based lending volumes have grown 6-8% annually over the past decade, significantly outpacing traditional commercial lending growth rates.
Default rates: ABL facilities historically experience lower loss rates (0.1-0.3%) compared to traditional commercial loans due to collateral-focused underwriting and intensive monitoring.
Transaction sizes: The median ABL facility size in Canada ranges from $2-5 million, though facilities from $500,000 to $50+ million are available depending on asset levels.
Industry concentration: Manufacturing and distribution companies represent approximately 65% of ABL borrowers, with wholesale trade, retail, and service businesses comprising most remaining volume.
Approval rates: Asset based lenders approve approximately 60-70% of applications versus 20-30% approval rates for traditional bank lines, reflecting ABL's collateral focus over historical profitability requirements.
CITATIONS
Commercial Finance Association. "Asset-Based Lending: A Comprehensive Overview." CFA Resource Center. Accessed January 6, 2026. https://www.cfa.com.
Business Development Bank of Canada. "Alternative Financing Options for Canadian Businesses." BDC Knowledge Bureau, 2024. https://www.bdc.ca.
Linkedin/7 Park Avenue Financial."
Deloitte Canada. "Canadian Middle Market Lending Survey 2024." Deloitte Financial Advisory Publications. Toronto: Deloitte LLP, 2024. https://www.deloitte.com/ca.
Office of the Superintendent of Bankruptcy Canada. "Asset-Based Lending and Insolvency Considerations." OSB Technical Publications, 2023. https://www.ic.gc.ca/eic/site/bsf-osb.nsf.
Canadian Bankers Association. "Business Credit Trends Report." CBA Research Publications, March 2024. https://www.cba.ca.
RSM Canada. "Working Capital Management Strategies for Growth Companies." RSM Insights Series. Toronto: RSM Canada, 2024. https://www.rsmcanada.com.
Medium/Stan Prokop/7 Park Avenue Financial ."Asset Based Loan Facility: How Canadian Businesses Unlock Hidden Capital" . https://medium.com/@stanprokop/asset-based-loan-facility-how-canadian-businesses-unlock-hidden-capital-a6e775de864e
Association for Corporate Growth. "Middle Market Financing Trends." ACG Capital Connection, 2024. https://www.acg.org.
Secured Finance Network. "Asset-Based Lending Industry Whitepaper." SFNet Publications, 2024. https://www.sfnet.com.
7 Park Avenue Financial ." Asset Based Lending Line of Credit: Working Capital Solutions for Canadian Business Growth" .https://www.7parkavenuefinancial.com/asset-based-lending-business-credit-line.html?desktop=true
