Overview

Asset-based lending (ABL) from Bank of Hawaii is designed for companies that need reliable, adaptable financing secured by tangible assets such as accounts receivable, inventory, equipment, and certain real estate. Whether your business is expanding, facing short-term liquidity needs, or restructuring operations, our ABL products provide predictable access to capital while preserving ownership and control.

Key Features

• Asset-backed lines of credit: Flexible revolving facilities tied to the borrowing base established from eligible receivables, inventory, and other approved collateral.
• Customized borrowing base: Tailored advance rates and eligibility criteria that reflect the nature of your business and the quality of collateral.
• Seasonal and short-term support: Cash flow solutions to manage seasonal fluctuations, growth spikes, or temporary working capital gaps.
• Competitive pricing: Interest and fee structures designed to align with the risk profile and asset composition of each borrower.
• Combination financing: Integration with term loans, equipment financing, and treasury services to create a comprehensive capital structure.
• Experienced servicing: Dedicated relationship managers and credit specialists with regional market knowledge and sector-specific expertise.

Benefits for Your Business

• Improved liquidity: Convert eligible assets into immediate cash to cover payroll, supplier payments, inventory purchases, and other operational needs.
• Enhanced flexibility: Revolving structures grow and shrink with your business, so you only borrow what you need.
• Preserve equity: Maintain ownership control without diluting equity through outside investors.
• Scalable solution: Facilities can be structured to evolve with your business as assets change in size or composition.
• Reduced risk of payment disruption: Smoother cash flow helps prevent missed opportunities and strained supplier relationships.
• One banking partner: Consolidate lending, treasury, and deposit services to simplify financial operations and reporting.

Who It’s For

Asset-based lending is particularly well-suited to middle-market companies, distributors, manufacturers, wholesalers, and service providers that have substantial tangible assets but may not qualify for traditional unsecured financing. Typical users include businesses experiencing rapid growth, companies with significant seasonality, turnarounds, and firms seeking to refinance higher-cost debt.

How It Works

The ABL process begins with a thorough evaluation of your business and its eligible collateral. We establish a borrowing base comprised of approved accounts receivable, inventory, equipment, and other assets. Advance rates are applied to each asset category to determine available liquidity. As receivables are collected and inventory turns over, your borrowing capacity adjusts accordingly, providing a dynamic financing line that aligns with operational cash flow.

Typical steps include:

1. Initial consultation and financial review
2. Collateral assessment and borrowing base calculation
3. Structure and documentation of the credit facility
4. Ongoing monitoring, reporting, and borrowing base adjustments

Risk Management and Controls

Strong risk management is integral to ABL. Bank of Hawaii combines tailored covenants, regular reporting, field examinations, and, where appropriate, third-party audits or appraisal processes to preserve asset value and protect lender-borrower alignment. These controls are implemented in a way that minimizes administrative burden and maintains operational efficiency for your management team.

Why Choose Bank of Hawaii

Choosing a lender is about more than rates: it’s about partnership, responsiveness, and local expertise. Bank of Hawaii provides:

• Regional expertise: Deep knowledge of local industries and commercial cycles across Hawaii and the Pacific region.
• Experienced teams: Relationship managers and credit professionals focused on delivering practical, business-oriented solutions.
• Customized structures: Financing packages tailored to your company’s operations, seasonal patterns, and growth plans.
• Long-term perspective: Commitment to building lasting relationships and supporting businesses through multiple phases of growth.

Common Use Cases

• Funding inventory purchases for peak seasons
• Bridging cash flow during accounts receivable conversion
• Refinancing higher-cost debt to improve liquidity
• Supporting acquisitions or capital investments with asset-backed capital
• Providing working capital during turnaround or restructuring efforts

Questions to Consider

Before pursuing an asset-based facility, consider the following:

• What assets make up the majority of your working capital—receivables, inventory, or equipment?
• How predictable and collectible are your receivables?
• Do you have seasonal peaks that require temporary increases in liquidity?
• Are you seeking flexibility today while preserving funding options for future growth?