Asset-based lending guide
Understand how asset-based lending can help established UK B2B businesses unlock working capital from invoices, stock, plant, machinery and other eligible assets.
What is asset-based lending?
Asset-based lending is a funding structure that can release working capital against business assets such as invoices, stock, plant, machinery or other eligible assets.
While invoice finance usually focuses on unpaid customer invoices, asset-based lending can take a wider view of the assets available within a business.
This can be useful where a company has working capital tied up across stock, receivables, equipment or other business assets, and needs a broader facility than invoice finance alone.
The right structure depends on the type of assets, asset values, business performance, existing facilities and the funding requirement.
Simple summary: asset-based lending can combine funding against different business assets to support working capital, growth or refinancing.
What assets can support lending?
Asset-based lending can be structured around one or more asset classes, depending on the business and the provider’s criteria.
Invoices
Unpaid B2B invoices can form part of the funding base through invoice finance.
Stock
Stock or inventory may support funding where it has suitable value, quality and movement.
Plant and machinery
Equipment, plant or machinery may be considered where valuation and ownership are clear.
Other assets
Some wider business assets may be reviewed as part of a broader funding structure.
When may asset-based lending be useful?
Asset-based lending can be considered where invoice finance alone may not provide enough headroom, or where the business has value tied up across several asset classes.
Growth and scaling
Funding can support larger contracts, higher stock levels, new customers or operational expansion.
Refinancing
A wider asset structure may help refinance or replace existing borrowing or finance facilities.
Add asset funding
Businesses may add funding against stock, plant or machinery alongside invoice finance.
Facility structure
ABL can provide a more tailored structure where funding needs are more complex.
Asset-based lending is usually considered when the funding need is wider than invoices alone.
Invoice finance may suit businesses that need:
- ✓ Funding mainly linked to unpaid B2B invoices
- ✓ A facility focused on sales ledger and debtor book
- ✓ Factoring, discounting or confidential invoice funding
- ✓ Working capital tied primarily to customer payment terms
Asset-based lending may suit businesses that need:
- ✓ A wider structure using more than invoices alone
- ✓ Funding against stock, plant, machinery or other assets
- ✓ Support for growth, refinancing, investment or change
- ✓ A more tailored facility for complex funding needs
Asset-based lending questions
Common questions from UK B2B businesses considering asset-based lending.
What is asset-based lending?
Asset-based lending is a funding structure that can release working capital against eligible business assets such as invoices, stock, plant, machinery or other assets.
How is asset-based lending different from invoice finance?
Invoice finance is usually focused on unpaid customer invoices. Asset-based lending can take a wider view and may include stock, equipment or other assets alongside receivables.
What assets can be used?
Potential assets include invoices, stock, plant, machinery and other eligible business assets, subject to valuation, ownership, quality and funder criteria.
Can asset-based lending support refinancing?
Yes, it can be considered where a business wants to refinance existing facilities, restructure funding or unlock additional working capital from assets.
Who is asset-based lending suitable for?
It may suit established UK B2B businesses with asset value in receivables, stock, plant, machinery or other assets, particularly where funding needs are wider than invoices alone.
Explore asset-based lending options
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