Asset-Based Lending When Factoring Isn't Enough.
Asset-based revolving credit lines secured against accounts receivable, inventory, and equipment. For manufacturers and distributors who need a more flexible, higher-capacity capital structure than standard factoring provides.
- Manufacturing CFOs & Controllers
- Wholesale Distributors
- 600+businesses funded
- $900M+invoices purchased
- 97%fund again
ABL Specialists
ABL is structured one to one.
Asset-based lending facilities are custom-structured around your collateral base, borrowing formula, and covenants. The right next step is a conversation with a specialist.
Facilities from $500K to $10M
Advance rates based on A/R aging, inventory quality, and collateral type
Can run alongside existing bank facilities or replace them
Advances against A/R, inventory, and equipment together
$500K–$10M
Facility Amounts
AR + Inventory
Eligible Collateral
Revolving
Borrowing
Base
Base
3-6 Weeks
Typical Closing
What ABL Advances Against
Three Collateral Types, One Revolving Facility
An ABL facility can advance against one or all three asset types simultaneously, creating a combined borrowing base that scales with your business. Advance rates vary based on collateral quality and aging.
Accounts Receivable
Outstanding invoices from creditworthy B2B customers. The highest-quality ABL collateral — predictable, liquid, and assessable. Aging and concentration limits apply.
Typical advance: up to 80–90%
Inventory
Raw materials, work-in-progress, and finished goods. Advance rates vary significantly by type — finished goods advance at higher rates than raw materials. Regular field exams validate valuation.
Advance based on eligible NOLV / cost
Equipment
Machinery, vehicles, and capital equipment with documented FMV. Typically a smaller component of the borrowing base — more useful as a supplemental collateral source than a primary one.
Advance based on appraised value
Choosing the right structure
Invoice Factoring vs. ABL
Both are asset-backed working capital products. The right choice depends on your business size, complexity, and how involved you want to be in the funding process. Many Sigma clients start with factoring and graduate to ABL as they scale.
| Invoice Factoring | Asset-based Lending | |
|---|---|---|
| Better for | Most growing businesses | Larger borrowers with complex collateral profiles |
| Advances against | Individual invoices | A/R, inventory, and equipment simultaneously |
| Facility size | Month-to-month, no minimum facility size | Higher facility sizes |
| How you draw | Invoice by invoice, funded the same day once your account is set up | Revolving line. Draw and repay at will within the borrowing base |
| Collections | Sigma manages collections, so your team stays focused on growth | You manage your own collections. No NOA required in most structures |
| Reporting | No borrowing base certificate required | Field exams and borrowing base certificates required periodically |
| Credit protection | Recourse, with optional credit insurance against a customer who doesn't pay | Recourse. Unpaid or aging receivables drop out of the borrowing base |
Ideal Borrower Profile
ABL Is Right for You If:
You've outgrown factoring
Your monthly invoice volume has grown to the point where you need a larger, more flexible facility and you have inventory or equipment that can support a combined borrowing base.
You need to self-manage collections
Your customer relationships require that you handle your own collections no NOA, no third-party contact. ABL allows confidential financing where factoring doesn't.
You hold significant inventory
Manufacturing businesses with substantial raw material or finished goods inventory can use that asset base to supplement their A/R-based borrowing capacity.
Your bank line is insufficient or unavailable
ABL is an alternative to or complement of a bank revolving credit facility. It can provide higher availability against the same assets and doesn't require the same covenant structure.
ABL Questions
What CFOs Ask About ABL
What's the minimum facility size?
Sigma structures ABL facilities from approximately $500K upward. Below that threshold, invoice factoring is typically the better-structured solution. We’ll give you a direct recommendation based on your collateral profile in the first conversation.
How does the borrowing base work?
Your maximum available credit at any point is determined by applying advance rates to your eligible collateral — typically a percentage of eligible A/R, a lower percentage of eligible inventory, and a percentage of equipment FMV. You submit a borrowing base certificate (BBC) periodically, and your credit availability adjusts accordingly. The specific rates and eligibility criteria are negotiated at closing based on your collateral quality.
Can ABL run alongside our existing bank line?
It depends on your existing lien structure. In many cases, an intercreditor agreement can be structured to allow Sigma’s ABL facility to operate alongside a senior bank line — Sigma takes a subordinate or split-collateral position. We review your existing agreements before proposing a structure.
How long does the ABL structuring process take?
ABL facilities are more complex than factoring and require collateral review, field examination, and documentation. Typical timeline from initial conversation to closing is 3–6 weeks for a straightforward facility. More complex structures or intercreditor negotiations may take longer. We’ll give you an honest timeline estimate in the first meeting.
Sigma's Full Suite
Other Solutions Worth Knowing
Fast, per-invoice working capital
Invoices funded the same day once your account is set up. Advance against individual invoices. No facility minimum. The right starting point for most B2B businesses.
Confidential A/R-backed revolving facility
No NOA. You manage collections. Revolving line against your receivables portfolio.
Working capital through Chapter 11
Debtor-in-possession financing for businesses in bankruptcy reorganization.
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Speak with an ABL Specialist
ABL is structured in a conversation. Tell us about your collateral base and we'll propose a facility structure within 48 hours.
- No personal guarantee
- Confidential review
- No commitment required