November/December 2014

FinalCut: Non-Bank ABLs Boosted by Tougher Regulations

ABF Journal illustrator Jerry Gonzalez provides his take on stricter banking regulations, which are creating new opportunities for non-bank providers of asset-based lending services to small and mid-sized businesses.



Non-Bank ABLs

According to market commentary from Old Hill Partners, stricter banking regulations are creating new opportunities for non-bank providers of asset-based lending services to small and mid-sized businesses.

As regulators are forcing banks to bolster liquidity and capital levels to prevent a replay of the global financial crisis, their middle market lending has dwindled. This presents an opportunity for non-bank providers of ABL solutions to provide loans to businesses in need of working capital.

“The tighter regulatory environment has resulted in less willingness on the part of traditional banks to lend to small and medium-sized businesses,” said John Howe, president of Old Hill Partners. “These businesses, which are critical to our continued economic growth and recovery, are no longer able to rely on financing from these channels, and are increasingly turning to companies like ours to supply short- to medium-term, structured, asset-based loans and an injection of working capital.”