Boost your business with asset-based lending by using your assets to get the working capital that you need with Live Oak Bank’s ABL programs featuring line of credit and factoring.
Need Capital? We Could Be Your Solution.
You might be in need of cash to keep your business moving—perhaps you’re growing quickly, you’ve hit a bump in the road, or you simply need funds to bridge the gap between invoicing your customers and receiving payment.
Even if you haven’t been able to secure the funds you need from a traditional bank, you have another option. Live Oak Bank’s asset-based lending (ABL) options might be the right match for you.
Why Asset-Based Lending?
While you’re waiting to get paid for your outstanding accounts receivable, you still need to invest the time, material, and labor into producing your products or services. ABL can help bridge the gap between invoicing and receiving payment for that product or service. We provide the cash you need to cover your overhead expenses until you get paid.
While traditional banks focus on strict requirements for loans such as a strong balance sheet and near-perfect financial condition, we focus on your potential and the quality of your accounts receivable. Our asset-based lending options allow your accounts receivable and inventory to be used as collateral for a line of credit. These options offer you great flexibility, allowing you to access capital when you need it most.
If you are looking for a unique funding source with pricing that fits between a traditional bank line of credit and more expensive commercial finance or Fintech options, consider asset-based lending with Live Oak.
The Advantages of ABL
Simplicity & Speed
Compared with traditional loan applications, the application process for ABL is streamlined and flexible. ABL is based on accounts receivable and inventory and requires three years of financials and credit information to demonstrate that you are billing for your products or services and that your customers are paying. The process is relatively succinct, and we can typically provide feedback on loan availability within 24 to 48 hours of receiving an application.
Flexibility & Elasticity
ABL offers you the flexibility to secure the capital you need when you need it. As your billings and invoices increase, so does your availability to borrow. It’s very elastic. There are also fewer restrictions with ABL, so you can use the capital as you see fit to keep your business going.
Availability & Affordability
Live Oak Bank offers higher availability than traditional banks without the often prohibitive cost associated with alternative financing solutions. We offer availability up to 95 percent and competitive interest rates.
Who is Eligible for ABL
Live Oak Bank is different from traditional banks. Our teams include business experts across a wide spectrum of industries, so we understand how your business works and what you need. We offer asset-based lending options to small- and medium-sized B2B businesses across the country. For ABL, we focus on the following industries: staffing, distribution, manufacturing and trucking, but will consider applications for businesses in a wide range of industries.
What Live Oak Bank Offers
Live Oak offers two types of ABL products—accounts receivable and inventory finance lines of credit and accounts receivable factoring.
LINES OF CREDIT
A line of credit allows you to have flexible access to money when you need it most. You can use it to pay expenses, buy inventory, and ultimately, have better cash flow each month. Using our line of credit option, we provide a loan to you using your accounts receivable as collateral.
This allows you to keep doing what you do—create your product, complete your service and bill your customer. You can borrow up to 85 percent against your outstanding eligible accounts receivable and borrow as needed. You can borrow as often as every day to meet your working capital needs. It’s very adaptable; as your sales grow, so does your ability to borrow.
As long as customers continue to make payments as they always have, we use those payments to reduce your loan balance.
We can also use your inventory as collateral, lending up to 65 percent against finished goods and raw material inventory.
Live Oak Bank also offers accounts receivable factoring, which allows you to obtain better-priced financing than typically offered by traditional factors. By factoring your invoices, you can get the money you need right away.
With factoring, you keep doing what you do best—complete your service or deliver your product and invoice your customer. We then purchase that receivable and advance you up to 95 percent of the invoice amount upfront on day one—typically the same day you issue the invoice. Then, customers essentially make payments directly to us. Once we receive payment from the customers, we give you the remaining balance less our fee.
Like the asset-based lending line of credit, it’s also very elastic. As billings and invoices increase, so does your availability to borrow, as long as your customers keep making payments.
Factoring differs from our asset-based lending line of credit option in that we actually purchase your account receivables versus using those receivables as collateral for a loan. Both options meet the need for working capital.
Turning It Around with ABL
Asset-based lending is a more viable lending option than ever and continues to be on the rise.
To see if ABL is the right choice for you, gather your recent financial statement and accounts receivable aging, and let us see if we can prequalify you. We will review your information, and if it looks like the right fit, we’ll provide you with an application.
THE LIVE OAK ADVANTAGE
- Designed for companies with $2MM to $50MM in sales
- Facility size between $500k and $10MM
- Advance rates up to 95% (accounts receivable); and competitive for inventory
- Continuous funding, whether factoring or line of credit
- Concierge service with an experienced account relationship manager to help manage your client’s account and provide monthly reviews
- Ongoing, 24-hour funding (after initial credit approval)
- Broker referral program available