Not limited to just invoices, an Asset Based Loan allows your company to borrow against accounts receivable but may also include fixed assets such as inventory and machinery. Asset Based Loans can be viewed as a halfway point between a bank Line of Credit and Factoring. In cases where the ABL is leveraged against invoices, it works much like a line of credit.

You may borrow up to 80% against eligible receivables, paying back the borrowed amounts plus interest when the invoices are paid. The amount you can borrow is determined by a borrowing certificate, which details your assets such as outstanding receivables (minus ineligible assets) and applies the resulting amount to your credit limit.