ABL loan structures – done right – can survive troubling economic headwinds far more easily than more brittle loan structures based on balance sheet strength.
This whitepaper aims to show that this need not be the inevitable consequence of a recession. With the correct due diligence in place – undertaken when structuring the loan – ABL structures can survive, and even prosper, in a downturn.
- The growth of “just in time” working practices has afforded ABL an opportunity to provide quick, accessible funding to fill the liquidity deficit in transaction that might otherwise be perceived as “too risky”.
- The next recession will provide a greater test of each structure given to a borrower due to the evolution of ABL as a lending technique since the 2008 crisis.
- If the correct due diligence has been undertaken when structuring the loan, ABL structures can survive, and even prosper, in a downturn.
- RedRidge Diligence Services is seen as a specialist with the ability to identify risks and undertake the tests required to give the lender comfort that all is properly represented by the borrower.