Public Commentary: The following guidance reflects FG Capital Advisors’ underwriting experience. It is provided for informational purposes only and does not constitute investment advice or a solicitation.
How to Secure an Asset-Based Loan of US$5 – 50 Million in Under 45 Days
When growth opportunities or working-capital spikes cannot wait for a traditional cash-flow facility, an asset-based loan (ABL) delivers speed and flexibility. With disciplined preparation, borrowers can close a US$5–50 million revolving facility or term loan in as little as six weeks. The roadmap below outlines FG Capital’s proven process—eligibility criteria, collateral requirements, documentation, indicative pricing, and a day-by-day execution timeline.
Eligibility & Collateral Requirements
| Category | Minimum Threshold | Advance Rate* |
|---|---|---|
| Accounts Receivable (B2B) | US$8 million eligible A/R | 80 – 90 % |
| Inventory (Finished Goods) | US$5 million net orderly-liquidation value (NOLV) | 50 – 65 % |
| Machinery & Equipment | US$3 million appraised FMV | 60 – 75 % |
| Real Estate (Supplemental) | Owner-occupied facility | 65 – 70 % LTV |
*Advance rates subject to field exam and third-party appraisal.
45-Day Closing Timeline
Day 1–5 | Indicative Term Sheet
• Submit management accounts (last 24 months), A/R aging, inventory report, and debt schedule.
• Lender issues non-binding proposal outlining advance formula, pricing, and diligence scope.
Day 6–20 | Field Exam & Appraisals
• Collateral field audit (3–4 days on-site).
• Inventory and equipment appraisals commissioned in parallel.
Day 21–30 | Credit Approval & Legal Drafting
• Internal credit-committee submission; approval typically within one week of final reports.
• Counsel drafts loan and security agreements; borrower counsel reviews and negotiates.
Day 31–40 | Closing Conditions
• UCC searches, landlord waivers, insurance certificates, and payoff letters (if refinancing).
• Borrowing-base certificate template agreed.
Day 41–45 | Funding
• Documents executed; liens perfected; funds disbursed or revolver availability confirmed.
Indicative Pricing & Fee Schedule
| Component | Typical Range |
|---|---|
| Spread over SOFR | 325 – 475 bps (drawn) |
| Unused-Line Fee | 0.25 – 0.50 % |
| Origination / Facility Fee | 0.50 – 1.50 % flat |
| Field Exam & Appraisal Costs | Pass-through (US$15 – 40 k) |
| Legal Fees (Lender Counsel) | Pass-through (US$25 – 60 k) |
Essential Documentation Checklist
- Audited financial statements (last two fiscal years) and latest interim package.
- A/R aging, customer concentrations, and dilution analysis.
- Inventory detail (SKU-level), turnover statistics, and warehouse addresses.
- Fixed-asset register with serial numbers and insured values.
- Organisational documents, board resolutions, and officer incumbencies.
- Environmental reports (if real-estate collateral).
Critical Success Factors
- Data Integrity: Clean, reconcilable ledgers accelerate field-exam sign-off.
- Management Availability: Prompt Q&A turnaround preserves timetable.
- Collateral Controls: Borrower willingness to grant lender dominion over lockbox or control account.
- Refinance Readiness: Early payoff-letter engagement avoids last-minute delays.
Engagement
Companies with eligible collateral and a funding requirement of US$5–50 million are invited to contact FG Capital Advisors. Our team will provide a confidentiality-protected review and indicative term sheet within five business days.
This document has been prepared solely for informational purposes. It does not constitute investment advice and should not be interpreted as an offer to buy or sell any security, financial instrument, or service. Independent professional guidance is advised before acting on any information contained herein.
