Illustrative structure — Asset-based
Growth that outruns the collection cycle
$3,000,000 revolving
Staffing and personnel
This is an illustrative example, not a completed transaction. It is prepared to show how a asset-based facility is put together. It does not describe any specific borrower and nothing in it is an offer or a commitment to lend.
The situation
A staffing business pays its people weekly and gets paid by its clients in sixty days. Every new contract widens the gap, so growth consumes cash rather than producing it.
A fixed-amount facility is the wrong instrument. What the business needs is a line that grows with the receivable book and shrinks when it does.
The structure
A revolving facility advanced against eligible receivables, sized by a borrowing base recalculated as the book turns.
Concentration and ageing limits set at the outset, so a single slow client cannot quietly become most of the collateral.
Availability moves with the base. The business draws what the receivables support and nothing more.
The outcome
Payroll is met weekly through the collection lag without the facility being resized every quarter.
Availability expands as the book grows, so taking the next contract stops being a cash flow decision.
At a glance
- Product
- Asset-based
- Security
- First lien on receivables; borrowing base
- Use of proceeds
- Payroll and working capital
- Repayment
- Revolving, against collections