What is Asset-based Lending?

Asset-based lending is a form of secured financing where a lender extends credit based on the value of eligible assets on a company’s balance sheet. Rather than relying primarily on cash flow or credit history, ABL focuses on collateral quality and marketability. WSFS Bank structures facilities to align borrowing capacity with the carry and convertibility of collateral, offering revolving lines of credit, term loans or a combination depending on borrower requirements.

Key Features

• Collateral-based advance rates: Borrowing capacity is determined by a percentage of eligible receivables, inventory, and equipment values, with periodic reporting to ensure transparency.
• Flexible structures: Facilities can be tailored as revolving lines, seasonal swings, or term commitments to address specific cash needs.
• Customized covenants: Covenants are designed to reflect the borrower’s operating cycle and industry dynamics, with focused financial and collateral reporting requirements.
• Dedicated relationship management: A single point of contact coordinates underwriting, ongoing monitoring and borrower support, ensuring responsiveness and continuity.
• Speed and certainty: ABL provides faster access to capital compared with some unsecured lending alternatives, particularly when timely liquidity is essential.

Types of Collateral Accepted

WSFS Bank evaluates a broad spectrum of collateral types, including but not limited to:

• Accounts receivable from diversified, creditworthy customers
• Finished goods and raw materials inventory with demonstrable turnover
• Commercial equipment and machinery
• Commercial real estate in select structures, used as part of a broader facility
• Other tangible assets that can be appraised and liquidated if necessary

Collateral eligibility and advance rates are assessed based on marketability, concentration risk, aging, and the quality of supporting documentation.

Who Benefits from Asset-based Lending?

ABL is suitable for a range of companies, including:

• Growing businesses needing working capital to support sales expansion
• Seasonal companies with cyclical cash requirements
• Businesses undergoing acquisitions or restructuring that require bridge financing
• Companies with significant tangible assets but limited free cash flow
• Manufacturers, distributors, wholesalers and service providers with receivable-based revenue streams

Benefits of WSFS Bank’s Approach

WSFS Bank aims to combine the predictability of asset-based underwriting with relationship-driven service. Key advantages include:

• Tailored financing solutions: Facilities are structured to mirror operational realities rather than forcing a one-size-fits-all approach.
• Hands-on expertise: Experienced credit teams and operational specialists work with borrowers to manage reporting, collections and collateral optimization.
• Operational support: Advisory assistance on cash conversion cycles, inventory controls and receivables management is available to help clients realize the full value of their assets.
• Transparent reporting: Clear reporting standards and regular communication reduce surprises and facilitate effective cash management.

Underwriting and Documentation

The underwriting process emphasizes asset quality and documentation. Typical steps include:

1. Initial assessment of financials, collateral schedules and business plan.
2. Collateral valuation and verification, including receivables aging, inventory counts and equipment appraisals as needed.
3. Negotiation of advance rates, covenants and reporting requirements aligned to business seasonality and risk profile.
4. Loan documentation that clarifies security interests, borrowing base mechanics and default remedies.

WSFS Bank works to streamline implementation while ensuring the legal protections necessary to support the facility.

Ongoing Monitoring and Relationship Service

Once a facility is in place, WSFS Bank partners with borrowers through periodic collateral reporting, borrowing base reconciliations and dedicated account management. This active monitoring helps ensure the facility remains aligned to the company’s needs and that available borrowing capacity is optimized.

Use Cases

• Accelerating growth by converting inventory and receivables into working capital
• Supporting acquisitions with bridge financing secured by acquired assets
• Managing seasonal fluctuations in cash flow
• Refinancing higher-cost debt to simplify capital structure and improve liquidity

Why Choose Asset-based Lending at WSFS Bank?

For companies seeking a pragmatic, asset-focused financing solution, WSFS Bank offers expertise, flexibility and a collaborative approach. The combination of tailored credit structures, operational guidance and responsive service helps businesses convert balance sheet strength into usable liquidity while maintaining the ability to pursue strategic objectives.