Texas businesses don’t slow down just because credit markets tighten. Payroll still runs, vendors still expect payment, projects still need materials, and growth opportunities still appear. When traditional banks reduce exposure, tighten covenants, or limit borrowing capacity, many companies turn to asset-based loans to access flexible working capital backed by real business assets.
Asset-based lending is not a last resort. It’s a practical capital strategy used by companies that need liquidity tied to operations—especially businesses with strong receivables, inventory, or equipment value. When structured correctly, an asset-based loan can stabilize cash flow, increase borrowing availability, and support expansion without relying on rigid bank formulas.
What Is an Asset-Based Loan?
An asset-based loan (often called an ABL) is a working capital facility secured by business assets such as accounts receivable, inventory, and equipment. Instead of relying primarily on traditional bank ratios, asset-based lenders focus heavily on the quality and value of the collateral and the company’s ability to generate cash flow through operations.
In simple terms: your business can borrow against the assets it already uses to produce revenue.
Why Asset-Based Lending Is Popular in Texas
Texas has a large and diverse commercial economy—construction, manufacturing, transportation, industrial services, energy services, and distribution businesses often carry meaningful collateral in receivables, inventory, or equipment. These assets can support a borrowing base that grows with the business, which is why many Texas companies use ABL to fuel expansion or improve liquidity.
- Improve liquidity for day-to-day operations and vendor payments.
- Stabilize cash flow during growth cycles or seasonal swings.
- Increase borrowing capacity compared to restrictive bank limits.
- Support expansion through working capital for larger projects or more volume.
- Access capital when banks tighten credit or reduce exposure.
What Assets Can Support an Asset-Based Loan?
Asset-based loans are commonly supported by a combination of collateral types. The right structure depends on industry, billing cycles, inventory type, and the quality of supporting documentation.
- Accounts receivable: eligible invoices from creditworthy customers.
- Inventory: finished goods, raw materials, or work-in-process, depending on eligibility.
- Equipment: eligible machinery, vehicles, and specialized assets used in operations.
When Banks Tighten Credit, ABL Can Keep You Moving
Many Texas companies explore asset-based lending after a bank reduces a line of credit, adds restrictive covenants, or limits growth borrowing. ABL often provides a more flexible alternative because it is tied to asset value and operational performance rather than one-size-fits-all banking requirements.
- Your bank reduces your line even though your sales are growing.
- Higher leverage or rapid growth makes traditional credit harder to renew.
- Your industry is out of favor with conventional lenders.
- You need more working capital than a bank will extend.
- Receivables and inventory are strong, but bank ratios are restrictive.
How Asset-Based Loans Work in Plain English
Asset-based loans often use a borrowing base—an available credit amount tied to eligible collateral. As receivables are collected or inventory changes, availability adjusts. The lender’s goal is to align the facility with real assets and cash flow in the business.
- Review: evaluate financials, collateral reporting, and operations.
- Structure: design a facility backed by receivables, inventory, and/or equipment.
- Advance rates: set eligibility and advance levels based on collateral quality.
- Funding: provide working capital access within the agreed structure.
- Ongoing support: monitor collateral and reporting to keep the facility aligned.
Why Choose Linkcrest Capital
Since 1987, Linkcrest Capital has helped businesses nationwide secure asset-based loan solutions designed around real-world lending situations—not rigid bank standards. We focus on the full financial picture and match borrowers with financing structures that support liquidity, stability, and growth.
- Nationwide lender relationships across multiple capital platforms.
- Asset-based lending options secured by receivables, inventory, and equipment.
- Flexible working capital structures designed for growth and liquidity.
- Solutions tailored to business realities—not bank templates.
Talk With a Specialist About Asset-Based Loans in Texas
If your business needs working capital and has strong assets in receivables, inventory, or equipment, an asset-based loan may be the right next step. Linkcrest Capital can help you evaluate options and structure the best available solution for your business goals.
Contact us today to discuss asset-based lending, or explore our related services:
FAQ: Asset-Based Loans in Texas
What is an asset-based loan?
An asset-based loan is working capital secured by business assets such as receivables, inventory, and equipment.
What assets can support an asset-based loan?
Common collateral includes eligible accounts receivable, inventory, and certain equipment, depending on the lender and industry.
Is an asset-based loan only for distressed businesses?
No. Many healthy companies use asset-based loans to support growth, manage seasonality, or increase liquidity.
How is the credit decision made?
Asset-based lenders focus heavily on collateral quality and cash flow trends, not only traditional bank ratios.
How do I know if asset-based lending is right for my company?
If you need flexible working capital and have strong collateral in receivables, inventory, or equipment, asset-based lending may be a fit.
