What is Comprehensive Asset Based Lending (CABL)?
CABL is senior debt provided and secured against all the assets of a business in a single structured funding package. Assets can include land and buildings, plant and machinery, in addition to the
traditional loan collateral of stock (inventory) and debtors (accounts receivable). In some cases, intangible assets such as brands or goodwill may also be taken into account. CABL is therefore
more akin to a multi-asset borrowing base facility and differs from plain vanilla single-asset finance such as invoice discounting or stock finance.
This approach allows companies with a strong asset base to provide a greater level of security to the lender. As a result, finance can be raised in excess of that which would normally be advanced by conventional lenders,
and at generally more attractive terms. In turn, as the CABL lender is usually secured across all aspects of the business, they will be interested in its success as a whole,
rather than just concentrating on cash flow or ease of realisation of a specific asset.
Financing for businesses undergoing change
CABL requires that the lender is familiar with all aspects of the borrower's business. It is a particularly supportive and flexible form of financing for companies undergoing periods of change.
Such situations may include:
- Acquisitions
- MBOs/MBIs or a combination of both
- Refinancings
- Turnarounds (early and mid-stage)
- Restructurings
- Debtor in Possession (US)
CABL will also be of particular benefit to large corporates who are facing challenges in the following areas:
- Cash flow
- Working capital
- Underperformance
- Overleverage
- Rapid growth
