Asset-based lending: a line of credit secured by your receivables and inventory.
Asset-based lending (ABL) is a revolving loan secured by your company's assets, mainly accounts receivable and, in part, inventory. It fits mid-size companies with large, recurring receivables that need more borrowing power than a bank's cash-flow loan gives them. At 1st Commercial Credit, ABL facilities start at $3 million.
Daniel Chirino · Business Development Officer, 1st Commercial Credit
Updated: October 29, 2026
- Since 20021st Commercial Credit
- 3,800+clients funded
- $5B+funded
- Direct fundernot a broker
- Every costin writing before you sign
1st Commercial Credit figures from its website, read October 29, 2026.
Who asset-based lending is for
- Companies with roughly $2.5 million to $10 million a month in sales, the range 1st Commercial Credit's ABL programs work with.
- Receivables as the core asset, with recurring invoicing to the same customers on terms of net 60 days or less.
- Manufacturers, distributors and service companies growing faster than their cash, or with seasonal swings.
- A balance sheet too leveraged for the line a bank would give.
From the credit side. Before 1st Commercial Credit, I worked on ABL, SBA and factoring deals at AmeriFactors. The difference with a bank is where the analysis starts: a bank looks at balance sheet ratios and cash flow projections, while an asset-based lender looks first at the quality of the assets, mainly who owes you and how they pay.
How the borrowing base works
Receivables first
Your eligible receivables, multiplied by the advance rate, set most of what you can draw. 1st Commercial Credit offers higher advance rates on receivables than banks usually do.
Inventory, with a cap
Inventory can add to the line, but at 1st Commercial Credit its part of the borrowing base stays under 25% of your receivables' face value.
It revolves
Unlike a fixed-term loan, the line rises and falls with your business: as customers pay and you invoice again, availability comes back.
What 1st Commercial Credit offers
The facility
- Facilities from $3 million, secured by receivables and inventory.
- High advance rates on receivables, with a fast initial setup and less paperwork.
- Cost: an administrative fee plus interest tied to the Prime rate. The exact numbers depend on your case and are confirmed in writing.
- Equipment can be financed or refinanced at longer terms through an affiliate lender that specializes in that equipment.
If you already have a bank line
An intercreditor agreement is made between your bank and 1st Commercial Credit. The receivables are assigned to 1st Commercial Credit, which lets you borrow at higher advance rates.
If what you have is a bank term loan you want to keep untouched, also look at second position factoring.
Source: 1st Commercial Credit's asset-based lending page, read October 29, 2026. Terms are confirmed in writing before you sign.
What can be used as collateral
- Accounts receivable: the favorite of asset-based lenders, because they turn into cash and have a set value.
- Inventory: second, because its value depends on selling it. Finished goods and marketable raw materials can count.
- Equipment and machinery: usually better suited to a term loan, since their value lasts as long as their useful life.
In some cases, lenders may also ask for personal assets of the owners as collateral. Ask about it upfront, and get the answer in writing.
When ABL is not the right tool
- Your facility would be under $3 million. Invoice factoring starts at much smaller volumes.
- Your sales are one-off projects instead of recurring invoices to the same customers.
- Your customers pay on terms longer than net 60.
- You'd rather not handle borrowing base reports. Factoring asks for much less reporting.
Questions owners ask me about ABL
Is asset-based lending a loan?
Yes. Unlike factoring, which is a sale of invoices, ABL is a revolving loan secured by your assets.
How is ABL different from factoring?
With factoring you sell specific invoices and the factor collects. With ABL you borrow against your whole pool of receivables and inventory, usually commit most of your receivables, and report your borrowing base regularly.
Can I keep my bank?
Often, yes, through an intercreditor agreement that assigns the receivables to 1st Commercial Credit.
How much do you sell a month?
Tell me your monthly sales, your receivables and your inventory. I'll tell you whether ABL, a receivables line or factoring fits better.
Also read: ABL vs factoring · accounts receivable financing · factoring vs a bank line of credit · all financing options