What are traditional ABL guidelines?

Answer 1

Traditional Asset-Based Lending (ABL) guidelines typically focus on the quality and liquidity of the collateral, primarily accounts receivable, inventory, and fixed assets. Lenders assess the borrower's creditworthiness based on the value of these assets, often requiring a borrowing base report to determine eligible collateral. Loan-to-value ratios, generally ranging from 70% to 90% for receivables and lower for inventory, are common. Additionally, lenders often impose financial covenants and regular reporting requirements to monitor the borrower's financial health and asset performance.