Thoughts on Asset Based Lending and a career in ABL?
I know there have been a couple of old posts about Asset Based Lending. Wondering what everyone’s current thoughts on ABL is and what has pay progression/comp been looking like. What sort of exit opps everyone has been seeing now/lately?
ABL is solid if you like credit but don’t want the volatility of LevFin or distressed. Pay is decent—analysts start around $85–95K base, bonuses are modest unless you’re originations. Progression is steady but not flashy.
Exit opps are mostly into other commercial lending roles, credit funds, or private credit if you build the right reps. Less common to see straight jumps into IB or PE, but doable with hustle and networking.
Agree with the above comment. Only word of caution is that if you do build a skill set in ABL; at some point you may be tempted to look at commercial banking or get approached by a commercial bank looking to build out their ABL capabilities. Do not believe anyone from a commercial bank saying they want to do ABL unless you are already familiar with their platform and it has a good reputation. They are not serious people.
They may comp you a lot to come on board and help them build it out; but unless you get some kind of commitment from C-suite level folks about their willingness to invest in the platform then don't believe it (even then). Commercial bankers cannot (generally) get comfortable with ABL and therefore prefer not to do it. They may recognize it has value and is profitable; but they (generally) can't get over their squeamishness about the product to put it on the books. And the first time there is any kind of problem loan situation (which is inevitable in ABL); there will be some maneuvering to shut off the product or restrict it to the point it's no longer ABL.
It’s a great industry to be in and I think there will always be a need for the product. As the earlier comment pointed out it’s a nice middle ground between LevFin / Distressed IB & commercial banking. Learning curve can be difficult especially in thinking through collateral analysis vs. traditional cash flow / EV analysis.
If you are starting your career I would definitely try to get on with one of the top bank lenders (Wells, BofA, JPM, PNC) that will provide training & connectivity across risk / originations before going to private credit, regional, etc. Comp is steady and obviously better in originations which is more “eat what you kill”. If possible, try to get on a desk where you are originating and syndicating large corporate transactions as this will expose you to the most interesting solutions (e.g. FILOs, unique borrowing bases, etc.).
Also an important distinction is if your bank uses the “product partner” model re: are commercial /investment bankers sourcing your deals / bringing you opportunities vs. do you have to go out and find them yourself? Being a product partner has obvious pros but you are also an afterthought & basically a cog in the wheel of executing the ABL portion of a transaction vs. cap markets activity.
Have seen people exit to Sponsor Coverage at banks, private credit, corporate banking, mid-cap investment banking with most moves dhappening while people are still Jr.
Do you have a sense of what associate compensation looks like at a credit fund doing ABL / equipment leasing?
I have no idea considering the degree of o/s variables.
What is the size of the fund &profile of investment?
What is the role of the associate? Origination of new business or portfolio management or workout?
What is the location of the role?
What is the org structure and stated progression of the role? Is this a rotational program or a permanent position?
Try checking salary ranges on similar job postings in NYC. That will probably give you an idea of the top of the market.
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