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.