The fundamentals of Asset-Based Lending
Wave Crest understands that liquidity and access to working capital are essential for growth and success. With institutional lenders becoming more restrictive on loan approval and lending limits, asset based lending (ABL) has become the go-to choice for business owners. ABL is a debt free line of credit designed to promote growth for businesses of all sizes. Whether you are launching a niche start up, or looking to expand your consulting services operation, asset-based lending is a much more flexible alternative to traditional loans.
Whatever your objectives, Wave Crest will work with you to construct a plan that will put your capital to work meeting these goals.
1. Wave Crest and Client review the business’s balance sheets, identify the assets that could be used as collateral.
2. Wave Crest will then establish a 'borrowing base', which is the amount of money the Client is advanced. The borrowing base is determined as a percentage of the value of the collateral that has been pledged. Generally, clients can borrow 75% – 85% of the value of their accounts receivable.
3. After verification, Wave Crest advances the capital established by the borrowing base.
4. Client prepares and submits its own invoices and works with Wave Crest to keep the borrowing base up-to-date.
5. Wave Crest and Client revise and expand the borrowing base as the Client’s business grows.
6. Wave Crest provides regular and detailed bookkeeping and ledger reporting to Client, electronically.
7. Clients collects the account, applies the cash on its records and updates the ledger of purchased accounts. From the cash proceeds collected, Wave Crest remits remits any balance to Client.