Asset-based Lending at Banc of California

Asset-based lending (ABL) at Banc of California is a tailored financing solution designed to help middle-market companies convert working capital assets into flexible credit facilities. Whether your business needs to support growth, smooth out seasonal cash flow variations, finance inventory buildup, or fund acquisitions, our asset-based lending programs prioritize your collateral — accounts receivable, inventory, equipment, and other eligible assets — to deliver predictable, scalable liquidity.

Why choose asset-based lending?

Asset-based lending is ideal for businesses that have valuable, tangible assets and require a lending structure that adapts to changing collateral values. Unlike traditional term loans that emphasize historical cash flows and credit metrics, ABL provides:

• Flexible borrowing capacity that grows and contracts with eligible receivables and inventory.
• Faster access to capital because the lending decision is driven primarily by collateral quality and concentration.
• Lower effective borrowing cost for asset-rich companies relative to unsecured or covenant-heavy financing options.
• Customizable structures including revolving lines of credit, delayed-draw facilities, and combined ABL/term loan formations to match operational cash flow needs.

Key features of Banc of California’s ABL offerings

• Collateral-based advance rates — Advance rates are set based on the quality of accounts receivable, inventory classification, and eligible equipment, giving you predictable leverage tied to current asset values.
• Dedicated relationship management — A specialist team works with treasury, credit, and industry experts to monitor collateral, streamline reporting, and support growth strategies.
• Integrated treasury and cash management — Seamless integration with receivables concentration, electronic invoicing, and payment processing helps maximize availability and reduce operational friction.
• Flexible covenant packages — Covenant structures are designed to reflect the asset-backed nature of the facility, often offering operational freedom and fewer restrictive financial covenants than traditional lending.
• Borrowing base transparency — Clear reporting on how borrowing capacity is calculated and periodic reconciliation practices help maintain confidence and planning accuracy.

Eligible collateral

Banc of California evaluates collateral conservatively to protect both the borrower and the bank. Typical eligible collateral includes:

• Trade accounts receivable from creditworthy customers
• Finished goods and certain raw materials as inventory
• Commercial equipment, machinery, and in some cases, vehicles
• Letters of credit, cash equivalents, and pledged deposits

Each asset class is evaluated for eligibility, concentration limits, aging, and collectability. Our underwriting process balances flexibility with disciplined credit risk management to preserve borrowing capacity even as businesses scale.

Industries we support

We serve a broad range of industries where tangible assets drive value and liquidity, including:

• Wholesale and distribution
• Manufacturing and industrial suppliers
• Retail and consumer goods
• Healthcare services and medical suppliers
• Food and beverage production
• Business services and professional firms with recurring receivables

Our industry expertise helps structure facilities that reflect seasonality, supply chain dynamics, and customer concentrations common to each sector.

Typical uses of proceeds

Clients use ABL to achieve a variety of strategic and operational objectives:

• Working capital to finance seasonal demand or growth
• Support for inventory build prior to peak selling periods
• Funding acquisitions or roll-ups with asset-based bridge financing
• Refinancing higher-cost debt to lower blended interest expense
• Capital expenditure financing tied to productive equipment

How the process works

1. Initial assessment: We review your business model, collateral composition, customer base, and financial statements to estimate preliminary advance rates and facility sizing.
2. Due diligence: Detailed collateral verification, concentrations analysis, appraisals for equipment or inventory where appropriate, and legal documentation review.
3. Structure and pricing: We propose a tailored borrowing base, advance rates, reporting cadence, and fees designed to align with your working capital cycle.
4. Implementation: Once executed, our operations team supports setup of reporting systems, electronic remittance processes, and ongoing collateral monitoring.
5. Ongoing management: Regular borrowing base certifications and proactive relationship oversight ensure the facility adapts to changing business needs.

Risk management and compliance

Effective ABL requires disciplined asset monitoring and compliance practices. Banc of California employs robust procedures for aging analysis, customer credit evaluation, inventory controls, and periodic audits. These controls safeguard availability, minimize losses, and preserve trust between borrower and lender.

Benefits for business owners and CFOs

• Improved liquidity: Convert balance sheet assets into usable capital without diluting ownership.
• Scalable financing: Borrowing capacity expands as your receivables and inventory grow.
• Operational flexibility: Use funds for strategic initiatives while maintaining working capital discipline.
• Predictable planning: Transparent borrowing base reporting supports cash flow forecasting and covenant management.

Final considerations

Asset-based lending at Banc of California is an effective financing solution for companies that need liquidity aligned with asset values and that operate in asset-rich industries. Our experienced team blends practical structuring, hands-on portfolio management, and industry knowledge to deliver credit solutions that support growth, manage seasonality, and provide capital for strategic initiatives. If your company has substantial receivables, inventory, or equipment and seeks a flexible, collateral-driven lending approach, ABL can be a powerful component of your capital structure.

Note: Terms, availability, and eligibility for asset-based lending products vary. Specific facility terms are subject to credit approval and customary documentation.