May 20, 2020
As the coronavirus pandemic and the policy response to it continues to affect businesses and commercial credit, many borrowers are converting revolving and secured cashflow credit facilities to asset-based lending facilities. On the ABA Banking Journal Podcast — sponsored by ProfitStars, a division of Jack Henry and Associates — Ed Gately of Mitsubishi UFJ Financial Group discusses this trend and what it means for borrowers and banks. Among other topics, Gately explores:
- What businesses that find asset-based lending facilities attractive, including large and middle-market firms with large inventories such as retailers and food and beverage firms.
- How the economic tail of COVID-19 is pushing more businesses to proactively move to ABL facilities to minimize the risk of breaching covenants in cashflow facilities.
- How lenders are managing challenges of ABL facilities, such as on-site inventory appraisals, during the pandemic.
- The kinds of conversations lenders should be having with their clients when considering a change to their loan facility.
This episode is sponsored by ProfitStars, a division of Jack Henry and Associates.