This is the first in a series of three that provide an overview of Asset-Based Lending.
Through asset-based lending, businesses can get access to much-needed working capital. The borrowing base certificate is the core concept of asset-based lending and the key processing challenge for lenders. Since each borrower is unique and the borrower provides a Borrowing Base Certificate, BBC allows the lender to determine the value of a company’s collateral. This valuation and the lender’s calculation support funding strategies and risk tolerance profiles from borrower to borrower.
Determining the borrowing base availability is not for the faint of heart. It involves assessing multiple sources of collateral, discounting numerous factors that can affect the eligibility of the collateral, and then applying the lender’s funding rates and fees. What adds to the difficulty is deciphering the documents sent by the borrower, which are often sent in various formats and where the borrower is running their own calculations.
While this all can seem daunting, using software can take the pain out of the process- tedious calculations, data entry, and potential human error – and streamline the BBC process for both the lender and the borrower.
At ABLSoft, we’ve provided asset-based lending software and expertise for decades and are the first to bring it to Cloud. With an integrated borrower portal and BBC processing tools, calculating borrowing bases is automated and easy. It has the flexibility to support diverse borrowing base needs ranging from bulk ABL to ledgered ABL and collateral such as AR, Inventory, or equipment.
Borrower’s data can be submitted and processed through several options to support formats in Excel and PDF. Lenders can count on the ABLSoft system to validate the calculations, and if there are any differences in ineligibles, the ABLSoft system will instantly flag them through its reconciliation tool. With this transparency, the lender and borrower can easily see the differences. This builds trust between the borrower and lender, ultimately leading to a happier customer experience and reduced work for both parties when they can agree and easily see how their availability is calculated.
Ultimately, the lender determines the borrowing base calculations to ensure optimal business health and minimal risk. Why not use the most flexible and robust tool on the market? Give ABLSoft a call at www.ablsoft.com.