Asset-Based Lending

Asset-based loans are typically used for working capital or to finance acquisitions, dividends or recapitalizations. These loans are generally secured by all of the borrower’s assets, with availability based on the value of the borrower’s accounts receivable, inventory, equipment and other fixed assets.

The lawyers of Troutman Sanders’ Finance practice routinely represent national and regional banks and commercial finance companies in single-lender and syndicated transactions in a wide range of asset-based loan transactions, including working capital facilities, employee stock ownership plan (ESOP) loans and acquisition financings. Our lawyers have significant experience advising clients in complex transactions, including letter of credit facilities, first lien and second lien structures, and cross-border and multicurrency credit facilities. We assist our clients in performing due diligence, structuring the transaction, preparing and negotiating documentation, and creating and perfecting security interests in all types of assets. We also provide legal advice in managing and restructuring problem credits, enforcing creditor rights, and structuring, documenting and implementing debtor-in-possession and exit financings.

Representative Experience

  • Represented a national lender in a $20 million senior secured accounts receivable line of credit and inventory loan supported by the Export-Import Bank of the United States working capital guarantee program.
  • Represented the asset-based lending arm of a national bank in a $12 million loan to a New York-based manufacturer of materials handling and food service equipment, to finance the acquisition of another materials-handling equipment company.
  • Represented a secured lender in $10 and $20 million multinational secured loan transactions secured by a blanket lien on all assets, including intellectual property and assets in the United Kingdom.
  • Represented lender in a secured $2.5 million revolving accounts receivable line of credit to a Wi-Fi provider.
  • Represented a national bank and its affiliates in connection with asset-based borrowing base revolving credit and term loan facilities for companies, including art galleries, prefabricated steel buildings and truck component manufacturers.
  • Served as counsel to a publicly held, multinational wood products company in connection with a $57 million asset-based credit facility.
  • Represented a national bank in a $70 million senior secured revolving line of credit and term loan to support acquisition financing.
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