Optimize Financing with a Bifurcated Collateral Loan Structure
Given its advantages over cash-flow loans in covenant flexibility, borrowing capacity and pricing, asset-based loans can be a powerful financing tool for many companies across a broad range of industries.
- Prospective borrowers should consider a bifurcated collateral structure with an asset-based revolver and term loan when making financing decisions.
- Even if conventional financing is available, an asset-based facility and term loan can provide flexibility, pricing advantages, and borrowing capacity benefits over a cash-flow revolver.
- The credit markets for bifurcated collateral structures are well developed and can often accommodate smaller deals involving fewer creditors.