Asset-based Lending at WesBanco

Asset-based lending (ABL) at WesBanco delivers flexible financing structured around a company’s working capital assets — such as accounts receivable, inventory, and equipment — rather than relying primarily on cash flow metrics. This product is designed for middle-market and growing companies that need immediate liquidity, want to optimize balance sheet capacity, or require a financing solution that can scale with seasonal fluctuations or rapid growth. WesBanco’s approach focuses on tailoring credit facilities to the unique collateral profiles and operational realities of each borrower, providing a pragmatic alternative to conventional term loans.

Who benefits from asset-based lending?

ABL is particularly well-suited for businesses that:

• Have significant levels of receivables, inventory, or valuable equipment.
• Experience seasonal or cyclical sales patterns requiring fluctuating liquidity.
• Are undergoing restructuring, growth, or acquisition activity and need bridge financing.
• Require higher advance rates on collateral than traditional cash-flow loans provide.
• Seek working capital solutions to support receivables financing, inventory purchasing, or capital expenditures.

Key features of WesBanco’s ABL facilities

• Customized borrowing base: Advance rates are determined by the composition and quality of eligible collateral — accounts receivable, finished goods, raw materials, and machinery or equipment.
• Revolving credit structure: Facilities typically operate as revolvers that can be drawn, repaid, and redrawn as collateral fluctuates, offering operational flexibility.
• Senior lien on collateral: Security agreements and perfected liens protect both the borrower and the lender by clearly defining the collateral package and priorities.
• Periodic reporting and monitoring: Borrowers provide regular collateral reports, aging schedules, and access to inventory and receivables records to maintain borrowing capacity.
• Availability for growth and acquisitions: ABL can be structured to support capital needs associated with acquisitions, working capital expansion, or facility upgrades.
• Competitive underwriting: Credit decisions consider collateral quality, industry dynamics, and management capabilities alongside financial performance.

Benefits for businesses

• Improved liquidity: Convert pending receivables and inventory into working capital to fund operations, payroll, and growth initiatives.
• Scalable financing: As receivables and inventory grow, borrowing capacity typically increases without renegotiating loan terms.
• Operational flexibility: Revolving facilities accommodate seasonal swings and short-term funding needs more easily than fixed-term loans.
• Balance sheet management: ABL can preserve other credit lines by providing a dedicated, collateral-backed source of capital.
• Faster access to capital: Collateral-based underwriting can accelerate approvals for companies whose profitability may lag but possess strong asset bases.

Underwriting and eligibility criteria

WesBanco assesses asset-based lending requests by evaluating the quality and documentation of collateral, industry risk, customer concentration, and management capability. Typical criteria include verifiable receivables, marketable inventory, and equipment with resale value. The bank also reviews aging reports, concentration of credit risk among customers, historical collections, and the borrower’s internal controls relating to billing, collections, and inventory management.

Documentation and covenants

Loan documentation for an ABL facility generally includes a loan agreement, security agreement, UCC filings on collateral, and often a subordination or intercreditor agreement if other lenders are involved. Common covenants and requirements may include periodic financial reporting, borrowing base certificates, minimum liquidity covenants, and restrictions on asset dispositions. These measures are intended to preserve collateral value and provide timely visibility into the borrower's operational and financial condition.

Typical uses of proceeds

• Working capital to fund day-to-day operations and seasonal inventory builds.
• Financing accounts receivable to accelerate cash collection and reduce DSO (days sales outstanding).
• Purchasing raw materials or finished goods to meet demand surges.
• Supporting acquisitions, roll-ups, or capital investment projects.
• Refinancing higher-cost debt to improve liquidity and interest expense profile.

Application and process overview

The process typically begins with an introductory review of the company’s financials and collateral composition, followed by a more detailed due diligence phase that includes verification of receivables and inventory. WesBanco works with management to establish a borrowing base methodology and to implement reporting protocols. Once terms are agreed and documentation is completed, funds become available under the revolving facility, with ongoing monitoring to adjust capacity as collateral levels change. The bank strives to combine diligence with responsive service to enable businesses to act quickly when funding needs arise.

Frequently considered scenarios

Asset-based lending is often chosen when companies outgrow invoice financing, need higher advance rates on inventory, or require a versatile credit facility to manage complex working capital cycles. It is also a valuable tool for businesses in turnaround situations where cash flow alone may not support traditional lending but tangible assets provide a reliable basis for credit.

Why choose WesBanco for asset-based lending?

WesBanco emphasizes a collaborative, relationship-driven approach to structuring asset-based facilities. The bank balances rigorous collateral evaluation with practical solutions tailored to operational realities, offering businesses a financing partner that helps convert assets into productive capital. Whether the need is short-term seasonal support or a multi-year revolver to sustain growth, WesBanco’s asset-based lending capabilities provide businesses with predictable access to liquidity backed by tangible assets.

For business leaders seeking a flexible, asset-backed approach to working capital, WesBanco’s asset-based lending solutions present a pragmatic means to stabilize cash flow, support expansion, and strengthen financial resilience.

Address Bank: Wheeling, West Virginia, U.S.
Bank: WesBanco
Headquarters: Wheeling, West Virginia
Products: Loans & Credit
Type: Asset-Based Lending