At Stone & Baxter, we represent both lenders and borrower in asset-based loans, which are typically used for working capital or to finance acquisitions or growth. These loans are generally secured by some or all of a borrower’s assets, typically its accounts receivables, inventory, or equipment, and availability is often based on the value of the assets.
One method of asset-based lending is lending secured by cash flow stream projected to be generated by the borrower over the life of the loan. We work with borrowers and lenders to ensure that our client is protected under the affirmative and negative covenants which are intended to protect the going-concern value of the borrower’s business. We advise our clients on the practical outcomes of provisions in the loan documents and help them negotiate the terms of the agreements.
Other means of asset-based lending is borrowing based on accounts receivables or inventory. Similar to this is a factoring transaction, where a factor will purchase (rather than take a security interest in) the accounts receivable. In these transactions, Stone & Baxter assist our clients in performing due diligence as necessary, structuring the details of the transaction, and preparing and negotiating the transaction documents.
A common asset with which to secure a loan is real estate. We have represented both financial institutions and borrowers in real estate collateralized loans and have substantial experience in helping clients understand available financial products and decide the financing method that best suits their business needs. For more on our commercial real estate practice, click here.