Cashflow vs ABL Lenders for Deal Financing

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February 24, 2025

by an member from University of Washington in Mount Vernon, WA, USA

Hello all,

What is your experience working with cash flow versus ABL lenders? We're looking at a couple of deals where the cash flow is too meager for a regular SBA, but there are significant assets under management that we suspect could help us finance the deal. However, I haven't worked with ABL lenders before and don't know how to approach deals with them in mind.

If you have worked with both before, it would be helpful if you could share your experiences or what we should know or keep in mind when considering ABL-financed deals.

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Reply by a searcher
from Texas A&M University in Elizabethton, TN, USA
If anyone knows fast industrial ABL that can even go 50% easily on industrial real estate, send me a DM! I'm not looking for a broker to shop around, but direct source.

I'm putting this comment here to also answer OPs question; It is incredibly hard in my experience to finance ABL against even fully Appraised CRE right now, without the Cash Flow and cash flow full underwriting package.

For non performing OpCo, you're lucky to get 50% LTV against RE. You might get 100% on equipment “purchases“ but refi on equipment not something you can count on with good DSCR and underwriting package.

That said, if you can't figure out how to monetize your deals like this... Send me a DM!

If you keep digging deeper on this point, you can see it's strangling Small Businesses right now, a lot due to over regulation of banks, IMO.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
I would be happy to have a conversation and go over the difference funding options available. We work with ABL lenders as well. But as a follow-up to some of the comments that have already been made, ABL lenders are advancing on a percentage of assets. Usually we see ABL deals make sense when it is a turn-around situation or there is a lot of equity going in and someone is looking for a convenient solution. It is not usually a good replacement for SBA lending or getting a deal where the cash flow just does not work done. Again, happy to connect. You can reach me at redacted
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