---
title: "Asset-Based Lending: Unlocking Liquidity Through Company Assets"
date: 2025-06-13
author: "Robert Kopka"
author_email: "robert@startmatch.ai"
teaser: "How to generate liquidity from accounts receivable and inventory—without giving up equity."
image: "https://images.unsplash.com/photo-1677442136019-21780ecad995?w=800\&h=450\&fit=crop"
category: "Funding"
featured: false
---
Asset-Based Lending: Unlocking Liquidity Through Company Assets
Asset-based lending (ABL) is a form of financing in which a company receives capital based on its existing assets. These may include accounts receivable, inventories, or machinery. The key advantage: You can unlock liquidity without giving up equity or having to meet rigid loan requirements.
This type of financing is especially suitable for companies that have already built up assets, for example in trade, manufacturing, or services. In this article, you’ll learn how ABL works, what its pros and cons are, and what founders should keep in mind.
How Does Asset-Based Lending Work?
In asset-based lending, your company receives a loan that is secured by its assets. Typically, the following types of assets can be used as collateral:
- Accounts receivable from goods and services
- Inventories such as raw materials or merchandise
- Machinery, vehicles, or technical equipment
- In exceptional cases, also trademarks or licenses
Financing often takes the form of a credit line that you can use flexibly. The amount of available capital depends on the value and marketability of your assets. For example, receivables can be pre-financed at 70 to 90 percent of their value.
A key difference from traditional loans: the focus is not on creditworthiness but on the quality and liquidity of your assets. The more stable and valuable they are, the greater your financial flexibility.
Advantages of Asset-Based Lending
Liquidity From Within the Company
With ABL, you can make tied-up capital usable—for example, from inventory or unpaid invoices. This strengthens your liquidity without requiring external involvement.
Flexibility and Scalability
The more valuable your assets are, the higher your credit line can be. In the best case, ABL scales with your company’s growth.
Quick Access to Funds
Because the focus is on existing assets, the financing can often be made available faster than a traditional bank loan.
Independence From Credit Rating
ABL is a way for young companies without long financial histories to access external capital—provided they have valuable, usable assets.
No Equity Dilution
You retain full ownership of your company and don’t have to give up control. This is especially attractive for founders with long-term growth plans.
Disadvantages of Asset-Based Lending
High Requirements for Assets
Only companies with liquid and valuable assets can make effective use of ABL. Receivables should be reliable, and inventory should be easily marketable.
Effort Due to Ongoing Reporting
Many providers require regular reports on receivables, inventory levels, or machine usage. External appraisals may also be needed.
Above-Average Costs
ABL can be more expensive than a traditional loan. Depending on the model and usage, the effective annual interest rate often ranges between 5 and 12 percent.
Not Suitable for All Business Models
Digital or consulting businesses without physical assets typically cannot use ABL. Startups in early stages without solid assets are also usually excluded.
Asset-Based Lending in Germany and Austria
Asset-based lending is gaining traction in Germany and Austria. It’s an attractive financing option, especially for medium-sized companies with existing assets that want to grow flexibly.
The application possibilities are diverse: inventory financing in retail, interim financing for project-based business models, or bridging seasonal fluctuations. What matters is that you have suitable assets and are willing to use them as collateral.
Access to ABL is particularly relevant for companies that, for various reasons, do not qualify for traditional loans—such as due to a lack of credit history, short company history, or capital constraints caused by growth.
Our Conclusion
Asset-based lending is a flexible financing option for companies with valuable assets. Compared to traditional loans, ABL offers more flexibility and faster processes. For founders with stable receivables, marketable inventory, or usable fixed assets, ABL can be a smart way to unlock liquidity and finance growth—without giving up equity.
