Asset-based Lending at Huntington Bancshares

Asset-based lending (ABL) at Huntington Bancshares is a flexible financing solution designed for companies that need working capital, growth funding, or balance sheet management tied to tangible assets. Unlike traditional term loans that primarily rely on cash flow metrics, ABL focuses on the value and liquidity of collateral such as accounts receivable, inventory, equipment, and certain marketable assets. This product is tailored to middle-market firms, family-owned businesses, distribution and manufacturing companies, and service providers that maintain significant tangible assets but may have fluctuating cash flows or seasonal revenue patterns.

Core Features

• Borrowing Base Facility: Credit lines sized to a borrowing base determined by eligible accounts receivable, inventory levels, and approved fixed assets.
• Revolving Availability: Ongoing access to capital as asset balances change, with periodic collateral evaluations and borrowing base certifications.
• Term Loans and Incremental Facilities: Capacity to combine revolving ABL with term debt for acquisitions, capital expenditure, or refinancing.
• Advance Rates: Competitive advance rates against eligible collateral categories, calibrated to industry risk and asset quality.
• Collateral Monitoring: Regular reporting, periodic audits, and tailored covenants to safeguard lender and borrower interests.

Benefits for Borrowers

ABL through Huntington Bancshares offers several advantages. It converts existing assets into working capital without requiring excessive dilution of ownership or sale of equity. The facility supports seasonal businesses by aligning availability with inventory build and receivable collections. Companies experiencing rapid growth or undergoing cyclical fluctuations find ABL more responsive than cash-flow-only lending. Additionally, predictable asset-based pricing and transparent structures minimize surprises and allow management to plan operations and investments with greater confidence.

Collateral and Eligibility

Typical eligible collateral categories include domestic accounts receivable, finished goods and certain raw materials inventory, machinery and equipment, and some marketable securities. Huntington Bancshares evaluates collateral eligibility with an emphasis on credit quality of receivable customers, inventory turnover rates, condition and marketability of equipment, and concentration risks. Eligibility criteria are flexible within industry norms and can be customized for special situations such as asset sales, seasonality, or multi-location operations.

Underwriting and Documentation

The underwriting process combines specialized asset evaluation with an assessment of management capabilities and industry dynamics. Documentation is structured to provide clear definitions of eligible assets, advance rates, reporting requirements, and customary representations and warranties. Borrowers should expect requirements for periodic borrowing base certificates, interim financial statements, and customary loan covenants designed to preserve collateral value and ensure timely communication of material changes.

Pricing and Fees

Pricing for ABL reflects the customized nature of the facility and is influenced by loan size, collateral composition, industry risk, and credit profile. Typical elements include a committed facility fee, an interest margin applied to the base rate or LIBOR/alternate reference rate, and fees for collateral monitoring and appraisals. Huntington Bancshares aims to deliver transparent pricing with competitive spreads and tailored fee structures that align cost with usage and performance.

Risk Management and Controls

Effective ABL administration relies on ongoing monitoring and robust controls. Huntington employs structured collateral monitoring, periodic audits, and electronic reporting where appropriate. Businesses benefit from clear expectations on reporting cadence, the handling of lockboxes or controlled accounts, and processes for resolving shortfalls or discrepancies. These safeguards help maintain liquidity while protecting both borrower and lender from unexpected deterioration in asset value or collections.

Industries Served

Asset-based lending is well suited to a broad range of industries. Huntington Bancshares has experience with wholesale and retail distribution, durable goods manufacturing, industrial services, healthcare suppliers, consumer products, and select business services. The bank’s sector knowledge supports nuanced borrowing base structures, flash reporting models, and advantageously tailored funding solutions for industry-specific working capital cycles.

Implementation and Lifecycle Support

From initial inquiry through closing and ongoing administration, Huntington Bancshares emphasizes a collaborative approach. Implementation includes setup of reporting templates, initial collateral valuation, establishment of controls, and training for client finance teams. After closing, the bank offers dedicated relationship management, periodic strategic reviews, and the ability to scale facilities as business needs evolve—whether to support growth, acquisitions, or refinance events.

Why Choose Huntington Bancshares for ABL

Borrowers choose Huntington for a blend of regional expertise, flexible credit structures, and hands-on execution. The bank balances disciplined underwriting with pragmatic solutions designed to keep client operations funded and focused on growth. Huntington’s ABL capabilities provide a predictable, asset-driven source of liquidity, with tailored oversight that fits the realities of operational businesses rather than a one-size-fits-all credit approach.

Common Use Cases

• Working capital to support seasonal inventory buildup and peak sales periods.
• Financing accounts receivable to bridge billing and collection cycles.
• Acquisition financing combined with a borrowing base for rollover of target assets.
• Refinancing of higher-cost debt to improve flexibility and capital structure.
• Capital expenditure programs supported by equipment-backed advances.

Final Considerations

Asset-based lending at Huntington Bancshares is a proven financing option for companies seeking asset-driven liquidity with structured oversight. Organizations considering ABL should prepare clear financial reporting, an accurate inventory and receivable aging profile, and an operational plan for maintaining collateral quality. With thoughtful structuring and ongoing partnership, an ABL facility can become a reliable cornerstone of a company’s short- and long-term financial strategy.

Address Bank: Columbus, Ohio 39°57′40″N 83°00′02″W  /  39.961153°N 83.000594°W  / 39.961153; -83.000594
Bank: Huntington Bancshares
Headquarters: Columbus
Products: Loans & Credit
Type: Asset-Based Lending