ABL Lite

Last Updated: Jun 6, 2019

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Last Edited By :

Created On : Jun 6, 2019

ABL lite refers to Asset Based Loans that do not utilize all of the controls, reporting or other tools typically found in a closely monitored ABL Loan. Controls typically might be similar to those found in a typical commercial (non ABL) relationship. This may be allowed for ABL clients who have demonstrated stronger performance. For example, ABL Lite controls may allow the borrower to only provide monthly collateral reporting summaries, and allow the borrower to otherwise directly utilize all of its cash receipts, instead of applying such receipts directly to reduce both the loan and the collateral. ABL Lite could include fewer or less frequently tested covenants, and fewer field exams. ABL Lite loans are most likely to be found in large syndicated loan transactions. An ABL Lite structure will typically contain thresholds or trigger points that if violated, could cause the monitoring levels and controls to spring back into place.