Real Deals: Transforming ABL Administrative Operations

Quicker to obtain, less expensive, and less restrictive than traditional bank loans, asset-based lending (ABL) has become a common source of non-bank funding, particularly popular among young, undercapitalized companies.

Yet for all its benefits, Ellen Cook, Head of Asset Based Lending, North America, and Amit Varma, Director of Operations DCM Europe, tell Real Deals Magazine that ABL has one potential pitfall: the loans can be difficult to service.

“The flexible legal framework that provides ABL lenders with a pathway for obtaining priority lien status on the buyer’s collateral has been huge in accelerating an acceptance of ABL lending,” Cook says. But because the loans are predicated upon a margined percentage of the collateral’s value, monitoring values is just one of the enormous daily tasks lenders have to tend to. That’s why many are outsourcing loan administration.

“Through our specialist teams, Alter Domus has vast experience providing back-office services for ABL loans,” Cook adds. “By leveraging our proprietary operating platform, RadarOne, we can take on the substantial administrative functions associated with ABL lending, enabling our clients to make better credit decisions and maximize their benefits.”

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