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An ABL Revolver Credit Facility : Reasons To Consider This Business

Credit Line
Which Of These Business Credit Lines Would Your Company Choose
OVRV!W " !nformation on the #usiness credit line $no%s as the & a#l revolver
credit facility ' Asset #ased lendin( is a solid alternative for these reasons provided
Business credit line solutions in Canada actually, believe it or not, come with choices.
One choice is the ' ABL ' revolver credit facility; its the cornerstone of ) Asset Based
Lendin( ) in Canada. What then are the reasons that Canadian business owners financial
mana!ers choose this finance solution" Let's di! in.
#he cru$ of the matter in ) ABL ) credit is really understandin! the differences between
other financin! o%tions and how it's used in a variety of circumstances. While the
ma&ority of com%anies see'in! this method of credit line asset financin! do in fact (ualify
its im%ortant to understand how the facility is structured.
One of the main !ood news %ieces in ABL revolvin( credit lines is that they are '
covenant li!ht ' ; business isn't always !ood news thou!h and some as%ects of this ty%e of
borrowin! includes ty%ically hi!her borrowin! costs as well as the need to %rovide more
on!oin! re%ortin! information around ' assets ' .
A !ood way to define the difference between asset based credit lines and traditional
Canadian chartered ban' solutions is sim%ly understandin! one is very ' asset based' ,
while the other is very ' cash flow ' based, the latter bein! of course the ban' offerin! . )t's
that on!oin! focus on borrowin! on all your assets under one facility that distin!uishes
the asset based revolver. *i!htly or wron!ly the ban's our ban's don't really loo' at it
that way.
)n almost all cases asset bac'ed lenders have a lot more ' asset ' e$%ertise, which one to%
e$%ert calls ' %redictable ' financin!. Where ban's loo' at historical, %resent and future
cash flows the asset bac'ed credit lender its your A*R+ inventory and fi,ed assets that
form the substance of your credit line.
+robably the best e$am%le we can %rovide to clients around why an ABL credit line
revolver ma'es sense is the fact that !rowin! sales %laces hu!e %ressures on wor'in!
ca%ital investment, #he result" ,ust when you need credit line financin! the most is when
ban' ratios and o%eratin! cash flo% ratios limit your com%any borrowin!-
#al' about a double whammy of bad news.
.o who uses Asset bac'ed financin! solutions" .ome of the lar!est com%anies in the
world actually, its &ust not !enerally advertised. /or the lar!er facilities for com%anies that
have !ood credit ABL solutions %ricin! is often even better than ban' financin!, but that
certainly doesnt a%%ly to -. Commercial finance borrowers.
.o which credit line solution ma'es sense for your firm, a traditional ban' facility or an
asset bac'ed ABL revolvin! credit line" .ee' out and s%ea' to a trusted+ credi#le and
e,perienced Canadian #usiness Financin( Advisor %ith a trac$ record of success
who can assist you in ma'in! the ri!ht choice.
-tan /ro$op 0 0 /ar$ Avenue Financial :
Business financin! for Canadian /irms , s%eciali1in! in wor'in! ca%ital, cash flow, asset
based financin! , 2(ui%ment Leasin! , franchise finance and Cdn. #a$ Credit /inance .
/ounded 3445 0 Com%leted in e$cess of 64 7illion 8 of financin! for Canadian
cor%orations . !nfo *Contact :
0 /AR1 AV23 F!2A2C!AL 4 CA2A5!A2 A--T BA-5 ABL CR5!T
L!2 6/RT!-
7ave A 8uestion *Comment On Our Blo( Or Canadian Business Financin(
Alternatives 9
0 /ar$ Avenue Financial
.outh .heridan 2$ecutive Centre
3694 .outh .heridan Way
.uite :49
Oa'ville, Ontario
L;, <,=
5irect Line > 59; :96 ?<;6
Office > 64? =36 3;?:
mail 4 s%ro'o%@<%ar'
) Canadian Business Financin( With The !ntelli(ent 3se Of ,perience )
-tan /ro$op