ABFJNovDec 2017

November/December 2017

ABL Outlook
Vol. No. 7
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COVER STORY

Robust Results: Upswing Leaves ABL Lenders Optimistic for 2018 - Despite political turbulence and Mother Nature running amuck, ABL lenders saw an upswing in business in 2017 after two flat years. ABF Journal contributor Lisa Miller spoke with five ABL executives who described a robust year filled with new partnerships and business opportunities and an optimistic outlook for 2018.

FEATURES

Opportunities and Challenges: Asset-Based Lending in 2018 - The digital world has transformed every aspect of our lives. Some of us still remember pasting photographs into albums and racing to answer the telephone mounted on the wall — picking up the receiver without knowing who was on the other end of the line. Technology has changed asset-based lending in ways no one could have predicted 20 years ago. ABF Journal contributor Hugh Larratt-Smith explores the evolving ABL landscape and evaluates the impact these changes will have in 2018.
The Changing Landscape of Non-Sponsor Finance - With too much capital chasing too few transactions, the middle market is ripe for change. Charlie Perer predicts an explosion of debt options for non-sponsor backed companies over the next 10 years. He notes that as non-banker lenders offer customers more service and flexibility, banks will respond by consolidating.
Why Is Asset-Based Lending So Expensive? Comparing Cost Structures for ABL and C&I Loans - There is a common belief, especially among business borrowers, private equity funds and M&A sponsors, that inefficiencies leading to predatory pricing exist in the small-cap and lower middle market business lending space. That assumption may be incorrect because the ABL cost structure is very different in comparison to inexpensive bank lending. By utilizing a new, more optimized funding structure, ABL firms may be able to greatly reduce their cost of capital.
Filling the Void: TradeCap Partners Offers Middle Market Borrowers a Complete Financial Solution - After working together for almost a decade at King Trade Capital, Bryan Ballowe and Clinton Stanton launched TradeCap Partners in July. The pair spoke to ABF Journal Editor Nadine Bonner and explained how they are working to partner with other lenders to provide lower middle market borrowers with complete financing solutions.

TURNAROUND CORNER

Preserving Brand Equity in a Turnaround: Six Steps to Preserving a Company’s Reputation - A company’s brand is a powerful if unappreciated asset. During the intense process of turning a company around financially, little thought is given to protecting its brand. Gordon Andrew explains why brand equity matters and provides steps to protect and enhance a brand during a turnaround.

SPECIALTY LENDING

Lenders Beware: Potential Red Flags When Financing Franchises - Franchising is becoming a popular option for a wide range of businesses. Franchising provides brand recognition for health clubs, bakeries and, of course, restaurants and fast food outlets. As the business model expands, franchisors often require third-party financing. Leonard Vines and Beata Krakus point out the red flags lenders should watch for before agreeing to finance a franchise.

LEGAL LINES

The Retail Crisis: Impact on Regional Shopping Malls - As brick-and-mortar retailers scramble to increase their online presence while fending off bankruptcy, regional shopping malls struggle to fill empty spaces and replace anchor stores. Stephen Selbst examines the issues lenders and investors are facing as this iconic part of U.S. life tries to reinvent itself.

FINAL CUT

Toys ‘R’ Us Files Bankruptcy, JPMorgan-Led Syndicate Provides DIP - JPMorgan agented a $3 billion debtor-in-possession loan for bankrupt retailer Toys “R” Us. Illustrator Jerry Gonzalez depicts the lender as Santa with a generous gift for the ailing toy seller.

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