ABL Agreement

An Asset-Based Lending (ABL) Agreement is a financial arrangement where a lender provides funding to a borrower secured by the borrower’s assets, such as inventory, accounts receivable, or equipment. This means that if the borrower struggles to repay, the lender has the right to seize and sell those assets to recover the loan amount. ABL agreements are commonly used by companies to secure financing based on the value of their assets, offering flexibility and faster access to funds compared to traditional unsecured loans. It aligns the loan's security with the company's tangible assets, reducing lender risk.