Who are the top providers of ABLs?
Need to get an ABL (asset-backed loan) for a lower mid-market investment, who are the shops that would provide this?
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What's your region? Revenue size, ebitda%, desired facility size, anticipated utilization and headroom day one?
In short, smaller local/regional banks often don't have an ABL offering because the BD team monitoring infrastructure is an investment. All the big banks have ABL offerings. I believe you should match small companies with smaller banks, mid with mid, etc. I used to have a ratio of revenues to bank asset size but I forget it. There are aggressive finance companies offering great options in the market especially if your deal has some hair or your ABL is a short-term part of a transition plan.
Given response, I'll probably have some recommendations.
Thanks for the response. Investment would be in Texas. EBITDA of $4M, and heavy on equipment, trucks and A/R so it's a good asset base. Not sure why ABLs would need hair or a short-term transition if they want to protect their debt by a stable asset base, but there is some hair on the deal. 3.5x MOIC projected in 5 years for equity return
My point was that banks will not want turnaround deals but a finance company can offer a quick solution to fund a transition to a lower priced bank LOC. Meaning - I'll gladly pay 12% interest and a 2% exit to fund a great deal for the first year of a turnaround and then have the results to justify a 3.5% interest rate with a bank . Long way of me trying to say that I see high interest rates as a tool and an opportunity, not necessarily an insult.
Texas I don't know. Some AB Lenders that I can think of in Texas are probably; Alostar, Celtic, MidCap, Comerica and Regions banks. Encina business credit Rick Lehter in OK is a good guy to work with. Summit Financial is solid but they don't want to fund lines over something like $5M.
Good luck
Super helpful, thanks bud. Many NYC and LA based shops have an office in Texas, so can you suggest some of the coastal AB lenders in general for the mid and lower mid market?
"so can you suggest some of the coastal AB lenders in general for the mid and lower mid market?" I largely did that above, at least the ones I believe exist beyond the NE.
Dig into the member directory of the TMA (www.turnaround.org) and you'll find plenty of ABL lenders. You can search by region or at least by chapter.
Good luck, Jeff
Super helpful thank you
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