MBitesize: Asset-Based Lending & Receivables Finance

During this time of social and business upheaval, lenders and borrowers have had to respond quickly to significant commercial and legal challenges.  Asset-Based Lending (ABL) & Receivables Finance (RF) structures are forming a key role in a narrative that is developing month-by-month.  For many lenders, working capital structures based on an EBITDA multiple are making less sense in light of unprecedented levels of business disruption and accordingly borrowing base structures are inevitably being evaluated by banks and funds alike. 

At Mayer Brown, we are participating in these discussions, analysis and transactions each day, and feel that the time is right for us to share some tips, pointers and guidance through MBitesize – our ABL & RF 101 refresher. We will be sharing our thoughts periodically on a wide variety of ABL & RF issues which are likely to be relevant as the ABL & RF market plays its role in mending the economy by supporting UK business. 

Please contact us should you wish to discuss any topic in further depth or detail.

Structuring

• Goods in Transit
• Bans on Assignment
• Receivables Purchase or Secured Borrowing Base 

Documentation

• Bank Account Control Agreements
• Eligibility Criteria and Operational Covenants
• Reserves
• Permitted Discretion

Legal

• Cash Dominion
• Security over Inventory and Plant & Machinery
• Set-Off
• Rome I
• Security over Receivables