LPC - Lending Lowdown Series Episode 33 | Asset based lending: Evolving taxonomy for direct lender vs bank arranged loans
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Jul 22, 2025 
Barry Bobrow, Head of Credit Markets for Regions Business Capital and founder of Asset Based Capital, dives into the contrasts between bank-arranged asset-based loans and those from direct lenders. He explains how asset-based loans can lead to low loss rates and high recoveries if managed correctly. Barry also explores the growing asset-based lending market, projected to hit $542 billion by 2024, and discusses the evolving role of banks versus non-bank lenders. Insights into asset valuation and market dynamics reveal the expanding opportunities in financing.
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Understanding Traditional ABL Loans
- Asset-based loans are a subset of secured leveraged loans structured to keep loan amounts within collateral liquidation value.
- They have low loss rates and high recovery, making lending feasible to sub-investment-grade firms.
Core Competencies of ABL
- Two core competencies in traditional ABL are valuing assets in worst-case scenarios and loan structuring to keep balances within asset values.
- These competencies require ongoing skill adaptation due to changing asset values and regulations.
Focus on Working Capital Assets
- Traditional ABL predominantly finances working capital assets like receivables and inventory in asset-rich industries.
- It also extends to fixed assets and intangibles but remains focused on revolving credit.