Asset Based Lending

Asset Based Lending (ABL) is a structured form of finance secured against a business’s tangible assets, such as stock, invoices, plant, machinery, or property. At Shawbrook, our ABL solutions are designed for mid-market businesses, providing flexible funding that supports strategic initiatives, refinancing, or pivotal transactions. For performing businesses, it can also leverage cashflows to provide additional funding, often to support a corporate transaction.

Asset Based Lending provides finance secured against a business’s tangible assets. The focus is on assets that can be used as collateral, including debtors, stock, plant and machinery, and property. At Shawbrook, we can offer flexible structures that allow businesses to use a combination of these assets within a single facility, sometimes alongside cash flow lending, depending on their needs.

Each asset is assessed for quality, liquidity, and valuation. These assessments form the borrowing base, which determines the size of the facility. This ensures the lending is appropriately aligned with the business’s asset profile and financial position.

Once an ABL facility is established with Shawbrook, businesses do not need to draw the full funding upfront. Instead, funds can be accessed as required, allowing the facility to flex in line with asset levels and trading activity. This provides ongoing financial headroom, supporting working capital, growth initiatives, acquisitions, or other strategic transactions while keeping the business in control.

Our dedicated relationship managers work closely with businesses, monitoring the facility alongside asset performance and operational activity to ensure the funding continues to meet evolving needs.

Our Asset Based Lending facilities are designed for mid-market businesses with an established track record, typically supporting transactions of £5m or more. The businesses we support generally demonstrate:

• Established trading history – At least two years of active operations in the UK, showing consistent business performance.
• Experienced management team – A capable leadership team with strong governance to oversee operations and funding.
• Financial viability – Positive trading trajectory, demonstrating the business is in a strong position to support a structured lending arrangement.
• Quality assets – Eligible receivables, inventory, and other tangible assets that meet agreed criteria and can support the borrowing base.

The key difference lies in what underpins the facility. Asset Based Lending is secured against tangible assets such as stock, invoices, or machinery, whereas Cash Flow Lending relies primarily on projected future cash flows.

For mid-market businesses with significant asset value but more variable cash flow, ABL can provide greater flexibility and borrowing capacity, allowing management teams to maintain operational control. Our Corporate Leverage Finance solution is an example of a cash flow-based facility, suitable for businesses with stable, predictable cash generation and asset-light, service-led models where tangible assets are limited.