One of Amerisource’s most popular financing programs is its Asset Based Lending product, commonly referred to as "ABL". Ideal for growth companies, Amerisource's asset-based revolving line of credit combines the ease and convenience of a bank line of credit governed by a "borrowing base" with the flexibility and increased availability of asset-based lending. If your company’s bank line of credit isn’t large enough to accommodate your growth and working capital needs, Amerisource’s "ABL" line of credit may be a good option for you.
The Amerisource ABL revolving line of credit can provide you with immediate access to crucial working capital to grow and sustain your business. In addition, you’ll get Amerisource’s 25+ years of experience managing accounts receivable to work for you, allowing you to focus on doing what you do best…managing the operations and growth of your business.
Amerisource's asset based revolving lines of credit are available for credit line sizes from $500,000 to $10,000,000.
Are you turning down new sales because you lack the cash flow to purchase raw materials or pay your employees? Amerisource’s revolving line of credit may provide you with the additional working capital you need to fuel your sales growth. And at Amerisource, you have real Freedom to Grow® because your line of credit can increase as your business grows — so you’ll never be constrained by your own success!
Do you know the tell-tale signs of a company about to file bankruptcy? How well do you really know the customers you are selling to? For that matter, how well do you know the prospects you are seeking to sell to? But monitoring customer credit risk requires expertise…and money. Subscriptions to the major credit reporting agencies can cost you well in excess of $100,000 a year. And a single credit manager employee can cost you an additional $75,000+ a year in wages, taxes and benefits. As an ABL customer of Amerisource, you’ll have access to over 25 years of unmatched credit expertise — at no cost to you. We’ll investigate the creditworthiness of your customers and prospects. And we’ll monitor that credit, track pay trends, and maintain individual credit limits for all of your important customers. So sleep well at night knowing your credit exposures are being continuously monitored by Amerisource.
Ever heard the collection industry phrase "The squeaky wheel gets the grease"? Experts agree that performing collection calls on your accounts receivable speeds up your receivable turnover and improves your cash flow. But hiring a staff to handle your collections is no easy task. A single collection employee can cost you in excess of $50,000 a year in wages, taxes and benefits. As an asset-based lending client of Amerisource, you’ll have unlimited access to a full staff of courteous and professional collection experts — all at no cost to you. And staying on top of your past due accounts receivable ("A/R") ensures that your customers understand how serious you take your business. Studies prove that consistent and properly managed customer contact reduces your A/R days outstanding, improves customer satisfaction, and increases repeat business.
Just ask your accountant — borrowing long term to finance your short-term working capital needs is a bad idea. Longer term debt, like fully-amortizing term loans, is designed to finance longer term assets such as real estate and equipment. Shorter term assets, such as accounts receivable, require short term financing — like revolving lines of credit. So if you’re financing your short term working capital needs with a long term loan, an asset-based revolver can help you get things back in balance. It may even mean retiring some of the your long term debt to reduce your monthly payment burden.
Any investment expert will tell you that a business needs to "stand on its own" in order to be worthy of investment. But if you’re continually supporting your business with personal assets and funding, you’ll never achieve this. An asset-based revolving line of credit allows you to obtain financial support for your business on its own merit, using your accounts receivable as the principle source of repayment. But unlike traditional loans that are based on the creditworthiness of the borrower, asset-based revolving credit lines are based on the creditworthiness of your customers.
In general, companies turn to asset-based lending when a bank won't approve a requested traditional line of credit. But that doesn't mean ABL is the province of distressed firms. Quite the contrary, ABL lines of credit are generally for fast-growing, profitable companies. The ABL line is designed to allow a growing company to maintain higher debt-to-worth ratios ("financial leverage") which are typically necessary during high-growth periods. The credit line size approved for a traditional bank line of credit is typically determined based on looking at sales and profitability for the last 2 to 3 years. But for a growing company, last year’s financing needs aren’t a good indicator of what a company needs this year. For these companies, ABL is hugely attractive. And, during a recession or periods of tight credit, when banks won’t lend to anyone, ABL lines of credit often become the financing of choice even for companies with stable sales and low financial leverage.
Qualification for the Amerisource ABL revolving line of credit is fairly straightforward. The three most important factors are:
If these attributes describe your business, you have a good chance at obtaining approval for Amerisource’s asset-based revolving line of credit.
Ideal candidates for the Amerisource ABL product include manufacturers, distributors and wholesalers, service-based businesses like staffing, transportation and printing companies. ABL lines are not available to consumer-based retailers, construction companies or healthcare providers.
The Amerisource ABL line of credit is custom designed to meet the need of individual organizations, offering maximum flexibility and availability of funds. Call us today to find out if ABL is a good option for your company.