Asset-based Lending at Stifel

Asset-based lending (ABL) with Stifel provides a flexible financing solution designed to support businesses that require working capital, capital investments, or strategic liquidity backed primarily by collateral. Stifel’s ABL capabilities combine industry expertise, tailored structures, and responsive service to help middle-market and large corporate clients optimize balance sheets, manage cash flow cycles, and pursue growth or restructuring initiatives.

Overview

Asset-based lending is a form of secured financing where loans are extended against a borrowing base comprised of eligible assets such as accounts receivable, inventory, equipment, and in some cases, real estate or contract rights. Stifel structures ABL facilities to reflect the seasonality, concentration, and risk profile of a client’s collateral while delivering transparent advance rates, covenant frameworks, and reporting requirements that align with business dynamics.

Key Features

• Custom collateral solutions: Facilities are secured by a tailored mix of receivables, inventory, machinery and equipment, and other eligible assets to maximize borrowing capacity.
• Borrowing base mechanics: Dynamic borrowing base calculations provide availability that tracks with operational performance and working capital fluctuations.
• Flexible structures: Revolving credit lines, term loans, letters of credit, and multi-advance facilities can be combined to meet short- and long-term needs.
• Competitive pricing: Rate tiers are aligned with collateral quality, facility size, and client credit profiles, offering cost-effective liquidity relative to unsecured options.
• Responsive covenant framework: Covenant packages reflect realistic operational metrics with focus on collateral performance rather than purely on leverage ratios.
• Dedicated servicing: Ongoing collateral monitoring, reporting, and treasury coordination support efficient utilization of the facility.

Benefits for Borrowers

• Improved cash flow: Convert receivables and inventory into immediate liquidity to support payroll, supplier payments, and growth initiatives.
• Enhanced working capital efficiency: ABL aligns borrowing capacity with business cycles, reducing the need for expensive short-term solutions.
• Balance sheet flexibility: Access to secured financing can preserve capital and limit shareholder dilution compared with equity raises.
• Support for transitional events: Facilities are ideal for businesses undergoing M&A, restructuring, or rapid expansion where predictable access to liquidity is critical.
• Scalability: ABL can grow with the business as collateral levels increase, providing an expandable source of funding.

Typical Use Cases

Companies across manufacturing, distribution, consumer products, healthcare, technology hardware, chemicals, and other asset-rich sectors use Stifel’s ABL to accomplish objectives such as:

• Financing seasonal inventory buildup
• Managing extended receivable payment terms
• Funding working capital during rapid growth or post-acquisition integration
• Supporting turnaround or restructuring plans
• Backstopping capital expenditure programs

Underwriting Approach

Stifel’s underwriting balances rigorous risk assessment with pragmatic structuring. Key considerations include the quality and aging of receivables, inventory valuation and turnover, concentration risk, customer credit profiles, legal enforceability of collateral, and the borrower’s operational controls. Stifel employs experienced credit officers, sector-focused bankers, and specialists to perform diligence that informs advance rates, reserves, reporting cadence, and field examination requirements.

Collateral Types and Eligibility

Eligible collateral is determined on a case-by-case basis but generally includes:

• Accounts receivable: Invoices from creditworthy customers, often with specific exclusions for related-party or disputed payables.
• Inventory: Finished goods, raw materials, and work-in-process valued on conservative appraisals and advance schedules.
• Equipment and machinery: Appraised assets with clear title and strong secondary market value.
• Real estate or leasehold interests: In selected structures, commercial real estate can supplement the borrowing base.
• Contract rights and intellectual property: In specialized cases, assignable contracts or monetizable IP may be included.

Deal Execution and Ongoing Management

Stifel emphasizes a disciplined and collaborative execution process. From initial assessment through closing, clients receive clear documentation of advance rates, reporting templates, and covenant expectations. Post-closing, Stifel supports treasury integration, daily or weekly borrowing base reporting, periodic field exams or audits, and proactive communication to resolve issues quickly. This active management model reduces disruptions and preserves borrower access to liquidity.

Risk Management

Risk mitigation is embedded in facility design: conservative advance rates, concentrations limits, ongoing monitoring, and periodic reappraisals protect both lender and borrower. Stifel teams work with clients to identify operational improvements that strengthen collateral performance and reduce default risk, such as improved billing practices, tighter credit policies, and enhanced inventory management.

Why Choose Stifel for ABL

• Industry experience: Sector-focused teams bring practical insights into collateral behavior and market cycles.
• Customized solutions: Stifel designs facilities that reflect client cash flow patterns and strategic objectives rather than applying one-size-fits-all templates.
• Integrated advisory: Ability to coordinate capital markets, M&A, and restructuring advisory with ABL to support complex transactions.
• Client-focused service: Dedicated relationship managers ensure timely responses, transparent reporting, and collaborative problem-solving.

How to Get Started

Initial engagement typically begins with a confidential discussion of financing needs, a high-level review of eligible collateral, and a preliminary term framework. Stifel then conducts tailored diligence to finalize facility sizing, documentation, and operational requirements. The process is structured to provide clarity around timing, costs, and closing prerequisites so clients can plan effectively.

Conclusion

Asset-based lending at Stifel offers a pragmatic and scalable approach to liquidity that leverages collateral value to support business objectives. Whether addressing seasonal needs, funding growth, or navigating complex transactions, Stifel’s ABL solutions are structured to align lender protection with borrower flexibility, backed by experienced teams that manage the entire financing lifecycle.

Address Bank: St. Louis, Missouri, US, USA
Bank: Stifel
Headquarters: St. Louis
Products: Loans & Credit
Type: Asset-Based Lending