Field Exams: Evolving Tools, Unchanging Purpose
December 22, 2025
By Doug Jung and Trent Tanber
Field exams may not make headlines, but they’re the unsung heroes of asset-based lending. This article explores how these rigorous, hands-on reviews continue to anchor risk management in a tech-driven world. If you’re a lender seeking deeper insight into collateral quality, evolving risks, and the future of ABL diligence—read on and stay ahead of the curve.
Despite decades of evolution in lending practices, one constant remains: the field exam. It serves as the quiet backbone of risk management in asset-based lending (ABL): hands-on, detailed, and essential. Rooted in traditional factoring diligence, field exams remain a cornerstone of ABL. Their core scope has remained remarkably consistent over time, encompassing the full working capital cycle—cash, accounts receivable (AR), inventory, and accounts payable (AP)—as well as compliance testing for payroll taxes.
Field examiners deploy a range of analytical tools to assess collateral performance and quality. These include AR roll forwards to evaluate turnover and dilution, inventory margin and turn analyses, and fraud detection procedures such as invoice/shipping tests and inventory counts. While new borrowing base components like unbilled AR or in-transit inventory have required additional procedures, and cross-border deals have introduced jurisdiction-specific nuances, the fundamental scope of field exams remains the same.
Technology Has Enhanced, Not Replaced, the Process
The evolution of technology has dramatically improved the quality and accessibility of data. In the green-bar paper era of the 1980s and 1990s, conducting a slow-moving inventory analysis was a laborious task, if not impossible within deal time constraints. Today, with more robust ERP systems and tools like Excel, field examiners can perform complex collateral analytics more efficiently and with greater precision.
Labor-Intensive and Multidisciplinary
The role of the field examiner is to take collateral data from multitudes of different systems and translate that into collateral information in a language readily understood by asset-based lenders—this is not an easy task.
One of the most misunderstood aspects of field exams is their labor intensity. This was true 30 years ago—and is arguably even more so today. Field examiners must first clean and standardize data drawn from disparate systems and formats before any meaningful analysis can begin. PDFs, inconsistent file structures, bespoke contracts, and complex corporate hierarchies all require careful handling and interpretation before Excel-based tools can be used effectively. In practice, this means starting with a wide range of unstructured inputs and distilling them into a common language and format familiar to asset-based lenders. The ability to cut through complexity and deliver a work product that simplifies key points of interest and lender risk is a rare skill that underpins the value examiners provide, which combine underwriting, auditor/ accounting and legal skills.
Beyond data wrangling, field examiners must sample and test detailed collateral elements: invoices, bills of lading (BOLs), inventory SKUs, Hilco Diligence Services bills of materials (BOMs), customer and vendor contracts, and more. These documents often vary in format and complexity, demanding that examiners quickly identify relevant information and assess control issues such as title passage, payment terms, rights and remedies and other issues.
Moreover, field exams are inherently iterative. Examiners don’t simply collect data, disappear, and return with a report. They engage actively with borrower personnel, ask questions, validate findings, and continuously refine conclusions.
Technology Brings New Risks
While technology has improved data visibility and analytical capabilities, it has also introduced new risks—particularly around data security. Field examiners handle highly sensitive, non-public information: customer lists, vendor relationships, gross margins, and more. This data must be protected from cyber threats and unauthorized access.
Please click here to continue reading. (Article continues on the top of page 71)
Despite decades of evolution in lending practices, one constant remains: the field exam. It serves as the quiet backbone of risk management in asset-based lending (ABL): hands-on, detailed, and essential. Rooted in traditional factoring diligence, field exams remain a cornerstone of ABL. Their core scope has remained remarkably consistent over time, encompassing the full working capital cycle—cash, accounts receivable (AR), inventory, and accounts payable (AP)—as well as compliance testing for payroll taxes.
Field examiners deploy a range of analytical tools to assess collateral performance and quality. These include AR roll forwards to evaluate turnover and dilution, inventory margin and turn analyses, and fraud detection procedures such as invoice/shipping tests and inventory counts. While new borrowing base components like unbilled AR or in-transit inventory have required additional procedures, and cross-border deals have introduced jurisdiction-specific nuances, the fundamental scope of field exams remains the same.
Technology Has Enhanced, Not Replaced, the Process
The evolution of technology has dramatically improved the quality and accessibility of data. In the green-bar paper era of the 1980s and 1990s, conducting a slow-moving inventory analysis was a laborious task, if not impossible within deal time constraints. Today, with more robust ERP systems and tools like Excel, field examiners can perform complex collateral analytics more efficiently and with greater precision.
Labor-Intensive and Multidisciplinary
The role of the field examiner is to take collateral data from multitudes of different systems and translate that into collateral information in a language readily understood by asset-based lenders—this is not an easy task.
One of the most misunderstood aspects of field exams is their labor intensity. This was true 30 years ago—and is arguably even more so today. Field examiners must first clean and standardize data drawn from disparate systems and formats before any meaningful analysis can begin. PDFs, inconsistent file structures, bespoke contracts, and complex corporate hierarchies all require careful handling and interpretation before Excel-based tools can be used effectively. In practice, this means starting with a wide range of unstructured inputs and distilling them into a common language and format familiar to asset-based lenders. The ability to cut through complexity and deliver a work product that simplifies key points of interest and lender risk is a rare skill that underpins the value examiners provide, which combine underwriting, auditor/ accounting and legal skills.
Beyond data wrangling, field examiners must sample and test detailed collateral elements: invoices, bills of lading (BOLs), inventory SKUs, Hilco Diligence Services bills of materials (BOMs), customer and vendor contracts, and more. These documents often vary in format and complexity, demanding that examiners quickly identify relevant information and assess control issues such as title passage, payment terms, rights and remedies and other issues.
Moreover, field exams are inherently iterative. Examiners don’t simply collect data, disappear, and return with a report. They engage actively with borrower personnel, ask questions, validate findings, and continuously refine conclusions.
Technology Brings New Risks
While technology has improved data visibility and analytical capabilities, it has also introduced new risks—particularly around data security. Field examiners handle highly sensitive, non-public information: customer lists, vendor relationships, gross margins, and more. This data must be protected from cyber threats and unauthorized access.
Please click here to continue reading. (Article continues on the top of page 71)
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