Will Europe Embrace Asset-Based Lending?

EDITOR'S PERSPECTIVE

Asset-Based Lending - a Win-Win Proposition?

Graham Buck 24 February

Rather like root beer and pumpkin pie, asset-based lending (ABL) is well-established in North America but something that the rest of the world has yet to develop much of an appetite for. However, the ABL focus in this issue of the gtnews weekly bulletin suggests that its moment may have arrived. While several of the world's leading economies are starting to pick themselves off the floor, the strictures of Basel III are still making banks reluctant to lend. Necessity being the mother of invention, a host of alternative means of funding have been developed by companies. As contributor John Brehcist, a consultant to the International Factors Group (IFG) notes, factoring and invoice discounting were also US initiatives whose appeal then sprtead to Europe and ABL looks set to follow down the same path. Its ability to provide banks with a measure of reassurance while offering savvy users with competitively-priced funding could see more develop a taste for ABL.

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