Asset-based Lending at Customers Bancorp

Customers Bancorp's Asset-based Lending (ABL) product is designed for growth-oriented companies that need flexible, reliable financing secured by working capital and other eligible assets. Built to support seasonal peaks, rapid expansion, acquisitions, and turnaround strategies, our ABL facilities combine competitive terms with responsive credit decisioning and experienced relationship management. This offering is ideal for middle-market businesses across manufacturing, distribution, wholesale trade, and other asset-rich sectors seeking predictable liquidity tied to the value of their receivables, inventory, equipment, and other collateral.

Key Features

• Borrowing Base Facility: Revolving credit lines structured around a daily or periodic borrowing base comprised of eligible accounts receivable, inventory, and, where applicable, machinery and equipment.
• Flexible Advances: Advances calculated as a percentage of collateral value to provide working capital that scales with business growth and seasonal fluctuations.
• Term and Revolver Options: Options for committed revolving facilities, with the ability to add term loans for acquisition financing, capital expenditures, or debt refinancing.
• Customized Eligibility Criteria: Eligible collateral definitions tailored to industry norms and the borrower’s operating profile, including concentration limits and receivable aging schedules.
• Experienced Underwriting: Industry-focused credit analysis and documentation that balance speed with thorough risk assessment to minimize operational disruption.
• Integrated Treasury Services: Optional lockbox, controlled disbursement, and sweep services to strengthen cash flow management and provide additional protections for lenders and borrowers.

Benefits for Borrowers

• Working Capital Optimization: Convert eligible assets into immediate liquidity to fund payroll, inventory purchases, and supplier obligations without diluting ownership.
• Scalability: Facility sizes and advance rates that adjust with collateral levels, allowing businesses to scale financing in step with growth.
• Predictability: Structured reporting and covenants that provide transparency of financial position and borrowing capacity, facilitating better cash planning.
• Speed to Funding: Efficient underwriting processes and proactive account management to accelerate funding for time-sensitive opportunities.
• Risk Mitigation: Collateralized structure lowers refinancing risk during economic cycles by anchoring availability to tangible asset values.
• Strategic Partnership: Relationship-driven service with a dedicated team that understands industry cycles, enabling proactive support during growth or stress periods.

Typical Structure and Terms

An ABL facility with Customers Bancorp typically includes a revolving credit commitment tied to a borrowing base formula. Eligible accounts receivable are often advanced at a high percentage (for example, a substantial portion of domestic, current receivables), while inventory advances may be provided at a lower percentage reflecting liquidation value and turn rates. In certain cases, fixed assets or equipment may be included either as part of the borrowing base or as separate collateral supporting a term tranche.

Pricing is competitive and reflects facility size, collateral mix, industry risk, and borrower credit profile. Facilities can be structured with periodic reporting, seasonal borrowing arrangements, and customary covenants to align with business operations. Customers Bancorp works with borrowers to design covenant packages that are transparent and manageable while protecting both parties’ interests.

Eligibility and Industries Served

Customers Bancorp’s ABL solutions are tailored to companies that maintain significant working capital assets on the balance sheet. Commonly served industries include manufacturing, wholesale distribution, consumer goods, apparel, food and beverage, and select service sectors where inventory and receivables are substantial. Eligibility is assessed based on collateral quality, concentration of receivables, historical cash conversion cycles, management experience, and overall financial performance.

Underwriting and Documentation

The underwriting process is collaborative and focused on understanding the operational drivers of cash flow and collateral value. Key elements include detailed due diligence on receivables and inventory, verification of legal title, evaluation of customer credit quality, and assessment of inventory turnover and obsolescence risk. Documentation typically includes a loan agreement, security agreements, UCC filings, customary financial covenants, and, where appropriate, subordination and intercreditor arrangements.

Monitoring and Relationship Management

Ongoing monitoring is essential to ABL. Customers Bancorp provides tools and processes for periodic collateral reporting, borrowing base certificates, and on-site audits as necessary to validate collateral and ensure compliance. Borrowers benefit from a dedicated relationship team that coordinates underwriting, operations, and treasury services—delivering timely responses to collateral fluctuations and business changes. Regular performance reviews help anticipate financing needs and adapt facility terms to evolving strategies.

Use Cases

• Growth Capital: Fund working capital to support geographic expansion, new product launches, or entry into additional sales channels.
• Seasonal Businesses: Bridge inventory build for peak seasons while aligning repayments with cash conversion cycles when receivables are collected.
• Acquisitions: Provide financing for strategic acquisitions, plus working capital to integrate targets and capture synergies.
• Operational Turnarounds: Offer liquidity to stabilize operations, manage supplier relationships, and implement restructuring plans.
• Refinancing: Replace higher-cost capital or simplify capital structures while preserving access to revolving liquidity.

Risk Considerations

While ABL can be a powerful source of liquidity, borrowers should understand the inherent trade-offs. Facilities require regular reporting and may include covenants that restrict certain transactions without lender consent. Collateral fluctuations can reduce availability and require management attention. To mitigate these risks, Customers Bancorp emphasizes transparent communication, proactive covenant management, and practical solutions tailored to the borrower’s operating reality.

How to Apply

Prospective borrowers typically begin with a confidential conversation to outline financing objectives, collateral profile, and growth plans. Customers Bancorp’s team will conduct an initial assessment and, where appropriate, propose a term sheet outlining structure, collateral eligibility, and indicative terms. Upon mutual agreement, due diligence and documentation proceed with a focus on efficiency and minimal disruption to operations.

Conclusion

Asset-based Lending at Customers Bancorp provides a flexible, asset-driven financing alternative for companies seeking growth capital, liquidity for seasonal needs, acquisition funding, or operational support. With industry-focused underwriting, customizable structures, and relationship-based service, this product empowers management teams to unlock the value of their working capital and pursue strategic objectives with confidence.

Address Bank: West Reading, Pennsylvania, United States
Bank: Customers Bancorp
Headquarters: Wyomissing, Pennsylvania
Products: Loans & Credit
Type: Asset-Based Lending