When to Use Asset-Based Loans

Asset-based loans let UK businesses borrow against the value locked up in their balance sheet, turning assets such as stock, receivables, machinery or property into working capital. For firms that are asset-rich but cash‑tight, this can be a practical way to fund growth, cover seasonal cash flow gaps or support restructuring when traditional unsecured lending is hard to access. 

This type of lending is secured, which means facilities can often be larger and more flexible than standard overdrafts, with borrowing limits linked directly to asset values rather than solely to profit or credit scores. Asset-based lending is widely used by mid‑market and larger SMEs across manufacturing, wholesale, logistics and other sectors with substantial physical or financial assets on their books.​

What is asset-based lending? 

Asset-based lending (ABL) is a form of secured business finance where the lender advances funds based primarily on the value of specific assets rather than on a company profile or historic profit records, as you do with other forms of lending. Eligible assets can include:

• Trade debtors
• Inventory
• Plant and machinery
• Vehicles
• Commercial property
• Intellectual property (such as brands or patents)

The lender typically agrees on an advance rate or loan‑to‑value ratio for each asset class, for example, a higher percentage against receivables and a lower percentage against slow‑moving stock. Facilities can be structured as term loans, revolving lines of credit or a blended “borrowing base” line that flexes as asset values change over time, making for a more tailored solution. 

The biggest risk with ABL is that if the borrower cannot repay, the lender has recourse to the underlying collateral, which is why robust valuations and ongoing monitoring are central to this type of funding.

When should my business use asset-based loans: example scenarios

Asset-based loans are often most suitable for established UK businesses with strong asset bases that need a significant, flexible funding line. Common use‑cases include funding a management buy‑out or acquisition, where ABL can unlock higher leverage than unsecured facilities by drawing on receivables, stock and property together. 

Manufacturers and wholesalers frequently use ABL to release working capital tied up in large debtor books and inventory, smoothing cash flow through seasonal peaks and troughs without constantly renegotiating overdrafts. 

Another scenario is turnaround or restructuring: a business under pressure from its existing bank can refinance onto an asset‑based facility, using the collateral pool to pay down old debt and create headroom for recovery plans. Fast‑growing companies experiencing rapid sales expansion but long customer payment terms may also choose ABL to fund bigger orders, hire staff or invest in equipment without waiting for cash to catch up.

You can find more White Oak UK case studies and examples in the customer stories section of our website. 

Am I eligible for an asset-based loan? 

Eligibility for asset-based lending in the UK typically depends on three main factors. These are: 

1. The quality and value of your assets
2. Your trading history, and
3. Your financial reporting.

Lenders usually look for established businesses with measurable, saleable assets such as receivables from creditworthy customers, commonly traded inventory, or well‑maintained equipment and property. Strong, up‑to‑date accounts, audited statements and clear asset inventories make it easier to evidence value and support higher advance rates. While ABL can be more flexible than traditional loans for businesses with ‘weaker’ profitability, lenders still assess overall financial stability, cash‑flow forecasts and credit history to ensure the facility is sustainable. Some providers focus on mid‑market borrowers, often with turnover above a few million pounds, while others will consider smaller SMEs where the asset base is sufficiently robust and diversified.

In terms of what we can offer at White Oak UK, our eligibility criteria are contingent on: how long you’ve been trading (3 years or longer is our required amount), your turnover (which should be between £10m and £250m), and finally, the size of your business. Ticked all of those boxes and want to see what amount you could unlock? Take a look at our eligibility checker for an instant answer that doesn’t affect your credit score.   

What is the process for asset-based lending? 

The asset-based lending process usually starts with an initial discussion and an indicative offer based on headline figures for debtors, stock, fixed assets and any property. If both sides wish to proceed, the lender undertakes detailed due diligence, including reviewing financial statements, ageing analysis of receivables, stock reports and asset registers, and may commission independent valuations or audits. Using this information, the lender sets advance rates and covenant terms, then issues a term sheet outlining facility size, pricing, security, reporting requirements and monitoring arrangements. Once legal documentation is negotiated and signed, security is taken over the agreed assets, and the facility becomes available, often as a revolving borrowing base that updates regularly as receivables and stock levels change. As the agreement continues, the lender will monitor the collateral through periodic reports and audits, adjusting available headroom if asset values fluctuate.

Fast, flexible & friendly asset-based loans from White Oak UK 

A tried, tested and trusted lender for over three decades, White Oak UK is a leader in asset-based lending, with exciting developments made across our ABL facility throughout 2025. Alongside asset-based loans, we also offer a range of other business funding products that are designed to foster growth and ensure success. Explore the complete offering here or get in touch with a friendly expert today on 0333 014 9000.  

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