ACL 390611 | MFAA Member | Established 2005
Asset-Based LendingSized by the Borrowing Base.
Most business lending is assessed on earnings, with security taken as a fallback nobody expects to use. Asset-based lending inverts that. The assets are the assessment, they are measured at what they would fetch in a sale you did not choose, and the limit moves as they do.
15 minutes with a commercial specialist. Bring an aged debtors listing and a rough stock figure. That is usually enough to say whether a base facility beats what you already have. We charge you nothing at any stage. Lenders pay us a commission on settlement and we disclose it in writing before any work begins.
Intellect Finance – Asset-Based Lending
Independent since 2005 | ACL 390611What Is Asset-Based Lending?
Asset-based lending is borrowing against what specific assets would fetch if they had to be sold, rather than against the earnings of the business as a going concern. The facility is sized by a borrowing base, a running calculation of eligible assets multiplied by an advance rate for each class. As the assets move, the limit moves with them.
That is the real line between this and ordinary business lending. A corporate facility is underwritten on the business continuing to operate, and the security exists mostly to control what happens in a restructure. Here the security is the analysis, and the question is what it would realise in a sale nobody wanted.
It is also broader than invoice financing, which advances against your receivables ledger and nothing else. Asset-based lending puts receivables, inventory and often plant under one facility and one limit, which suits a business carrying real stock or equipment rather than debtors alone.
Common Situations
Why People Come to Us for Asset-Based Lending
Six situations. The common thread is a balance sheet that is worth more than the profit and loss suggests.
Growing faster than the earnings support
Revenue climbing, working capital consumed by it, and a bank sizing the facility on last year’s profit. The assets grow with the trading even when the earnings lag.
Heavy stock and thin margins
Importers, wholesalers and distributors whose value sits in inventory rather than in retained profits. Stock in a base is the point of difference from an invoice facility.
A year that will not pass a serviceability test
A loss, a one-off, or a restructure that makes the financials unhelpful. The assets are still there and can still be measured.
Funding an acquisition off the target’s balance sheet
Where the business being bought carries the debtors and stock. Often paired with other layers. See acquisition finance for the rest of that structure.
Replacing a facility that keeps getting reviewed
An overdraft that shrinks annually regardless of trading. A base facility at least moves for a reason you can see.
Unwilling to put the family home behind it
The most common reason people ask. It is a legitimate one, and it is also the one where the honest answer is most often that the property route is cheaper.
Social Proof
120+ Five-Star Google Reviews
Business owners, investors and developers alongside home buyers. Pulled live from Google.
Joseph Sukkar
Principal Broker · ACL 390611
Who You’re Dealing With
Built on 25 Years in Australian Finance
Joseph Sukkar started in finance in 2000 and founded Intellect Finance in Penrith in 2005. Since then the team has arranged more than 6,500 loans for clients across Australia, from first homes to complex commercial and asset finance.
Asset-based lending sits with Charbel, our Commercial & Complex Lending Specialist, and the useful work on one of these files happens before any limit is quoted. We take the actual aged debtors listing and apply the exclusions a funder will apply, so the number you plan around is the eligible base rather than the headline one. We price the property route beside it, because for most Australian businesses that route is cheaper and simpler, and where it wins we say so.
Part of Our 100+ Lender Panel
The names most people recognise are residential lenders. Much of what we arrange runs through funders that do not advertise to the public. Accreditation with a lender is not an endorsement by it, and which lender suits you is decided by your file rather than by who is on this list.
Send Us an Aged Debtors Listing.
We can size a base off that alone.What Actually Decides It
The Borrowing Base Is the Facility
Everything else in an asset-based facility is built around one calculation: eligible assets, multiplied by an advance rate for each class, added together. Understand how that number is produced and you understand the product, including the parts that surprise people afterwards.
The limit is recalculated rather than granted
A term loan gives you a number that stays put. A borrowing base gives you a formula. It is recomputed from reporting you supply, usually monthly and sometimes more often, so your available funding rises and falls with your own ledger. That is a genuine advantage when you are growing and an unwelcome surprise when you are not.
Advance rates differ sharply by class
Receivables attract the highest rate, inventory sits well below them, and plant lower again. That ordering is not arbitrary. A debt owed by a solvent customer is close to cash. Stock has to be found a buyer and may be worth far less outside your business than in it. Plant is slower still. The rate reflects how confidently the lender could convert it, not what you paid.
Eligibility does most of the work
The advance rate gets the attention and the eligibility rules decide the outcome. Invoices past a certain age, debtors above a concentration limit, related party invoices, contra accounts where a customer is also a supplier, foreign debtors, retentions and disputed amounts are commonly excluded before the rate is applied. A ledger and an eligible ledger are two different numbers, and the gap is often large.
It is valued at what it would fetch rather than what it is worth to you
This is the conceptual heart of it. The lender is not asking what the asset contributes to your business. It is asking what it would realise if sold separately, at a time not of your choosing, by someone with no interest in your operations. Specialised equipment and bespoke stock score badly on that test precisely because they are valuable to you and to almost nobody else.
Reporting is the price of admission
Expect a regular borrowing base certificate, aged receivables and payables, inventory reporting, reconciliation to your accounting system, and periodic field examinations where the lender or its agent inspects the collateral and tests the ledger. This is a continuous obligation and it does not ease off once the facility is running. Businesses without the bookkeeping to sustain it should not take one.
Your security does not rank first on those assets
Most people assume secured means paid first. ASIC states that where a receiver is appointed under a circulating security interest, money from circulating assets goes first to the receiver’s costs and fees in collecting it, then to certain priority claims including employee entitlements, and only then to the secured creditor. Security over trading assets such as debtors and stock is generally a circulating security interest. That ordering is part of why advance rates sit where they do.
Checked August 2026. Insolvency ordering sourced from ASIC. ASIC states that where a receiver is appointed under a circulating security interest, money from circulating assets is applied first to the receiver’s costs and fees in collecting it, then to certain priority claims including employee entitlements, and then to repayment of the secured creditor’s debt. See ASIC’s guide to receivership for employees. The limits of Best Interests Duty are set out in ASIC Regulatory Guide 273. Everything else on this page is described in the important information at the foot of the page.
The Honest Comparison
Borrow Against the Ledger or Against the Property?
Most businesses that ask us about asset-based lending have a property they could use instead and would rather not. That preference is understandable and it is expensive. It deserves to be a decision rather than a reflex.
Asset-based facility
- The limit grows as the business grows, rather than being reset once a year
- Available where the earnings will not pass a serviceability test but the assets are real
- Keeps property out of the structure, which some owners value above the cost
- More expensive, and the reporting burden is continuous rather than annual
- The limit falls when the ledger falls, which is usually when you need it most
Property-secured facility
- Materially cheaper, and a far wider lender panel to choose from
- A fixed limit that does not shrink because a customer paid late
- Almost no ongoing reporting once it is settled
- The property is committed, and for many owners that is the whole objection
- Sized on value and serviceability, so it does not follow a fast-growing ledger
The base shrinks exactly when you need it most. That is the structural weakness of this product and the thing worth understanding before you sign. When customers slow down, orders soften and stock ages, your eligible assets fall, so the formula reduces your limit in the same month your cash need increases. A property-secured facility does not behave that way. So the honest position is this: if you have property security available and you are choosing an asset-based facility mainly to avoid using it, you are paying a real premium for that preference, and you should decide whether it is worth it with the number in front of you rather than as an instinct. We will put both structures side by side and price them, and where the property route wins we will say so. That is the smaller commission and the shorter engagement, and it is still the right answer more often than not.
Price the Property Route Beside the Base
The premium you would pay to leave the property out of it, and the usable limit rather than the headline one. Fifteen minutes. No obligation.The Difference
The Quoted Limit and the Usable Limit Are Different Numbers
Almost every disappointment with this product traces to the same place. The headline facility size was calculated on a ledger, and the money actually available was calculated on an eligible ledger.
We Model the Base Before Anyone Quotes a Limit
We take your actual aged debtors listing and apply the exclusions a funder will apply: ageing, concentration, related parties, contras, foreign debtors, retentions and disputes. What comes out the other side is the number worth planning around. It is usually lower than the one you were expecting and it is the honest one.
We Price the Property Route Alongside It
Before recommending a base facility we cost the alternative, because for most Australian businesses a property-secured facility is cheaper and simpler. If you have already decided against using property we will still show you the difference, so the decision is made on a number rather than on a feeling.
Always in Writing
Asset-based lending is business purpose lending, so Best Interests Duty does not apply. ASIC Regulatory Guide 273 limits that duty to credit regulated under the National Credit Act. We disclose in writing how we are paid before you proceed regardless of whether the law requires it.
We’ll Tell You the Ledger Won’t Carry It
Where the eligible base is too small to be worth the cost, where the debtor book is concentrated in two or three customers, or where the bookkeeping cannot sustain monthly reporting and a field examination, we will say so before you start. Those conversations end the engagement rather than beginning one.
The Process
What Happens and What We’ll Need
The only facility we arrange where the work continues after settlement rather than stopping at it.
-
15 minutes
The shape of the balance sheet
Roughly what you are owed, roughly what stock you carry, who your largest customers are and what terms you trade on. No documents. You will finish the call knowing whether there is a base worth building and whether the property route would beat it.
-
We model
The eligible base rather than the headline one
We take the aged debtors listing and strip out what a funder will strip out, then apply realistic advance rates by class. That produces the usable limit. If it is not materially better than what you have now, we say so at this point, before anyone has paid for anything.
-
You gather
Ledger and stock detail plus entity structure
More granular than a term loan application, and the granularity is the point. A funder is underwriting the detail rather than the summary.
- Aged receivables listing, by customer
- Aged payables listing
- Inventory report with ageing and location
- Plant and equipment schedule
- Business financials and management accounts
- Your standard terms of trade and any customer contracts
- Existing facilities and current security registrations
- Entity structure and identification for directors
-
We manage
Field examination then documents then the first certificate
Funder selection, then the field examination where the lender or its agent inspects the collateral and tests the ledger, then documentation and settlement. We stay through the first borrowing base certificate, because the reporting rhythm is where these facilities most often go wrong in month two.
Track Record
A Small and Technical Corner of the Market
Very little Australian business lending is written this way, and the funders who do it assess differently from everyone else. We have run a commercial desk alongside residential since 2005.
Related Options
Simpler Ways to Get to the Same Place
A borrowing base is the most complex working capital structure we arrange. For a lot of businesses one of these does the job for less.
Invoice financing
Receivables only, far less reporting. The right answer where the debtors are the whole story.
Commercial property loan
The cheaper route where a property is available. Worth pricing before you decide against it.
Cashflow and working capital
Where the need is a defined gap rather than a facility that has to scale with the ledger.
Equipment finance
Where the plant is the point. Funding it directly usually beats putting it in a base.
Corporate loans
Lending against the business as a going concern rather than against what it owns.
Mezzanine finance
Where a base facility gets you close and something has to sit behind it.
We’ll Model the Eligible Base.
Then you can decide with a real number instead of a headline one.Questions Answered
Asset-Based Lending FAQs
The questions finance directors and business owners ask us before committing to a borrowing base facility.
What is asset-based lending?
Asset-based lending is borrowing against what specific assets would fetch if they had to be sold, rather than against the earnings of the business as a going concern. The facility is sized by a borrowing base, which is a running calculation of eligible assets multiplied by an advance rate for each class. As the assets move, the available limit moves with them.
What is a borrowing base?
The calculation that sets how much you can draw at any given moment. The lender takes each class of eligible asset, applies an advance rate to it, and adds the results together to produce the limit. It is recalculated regularly, usually monthly and sometimes more often, from reporting you provide. The borrowing base is the facility, in the sense that everything else in the agreement is built around it.
What assets can be included in a borrowing base?
Most commonly trade receivables, then inventory, then plant and equipment. Some facilities also include property. What matters is not whether you own the asset but whether the lender considers it eligible, how readily it could be sold, and what it would realise in a sale that was not of your choosing.
How is asset-based lending different from invoice financing?
Invoice financing is a single asset class. It advances against your receivables ledger and nothing else. Asset-based lending is a structure across several classes, typically receivables plus inventory plus plant, under one facility with one limit. It suits businesses that carry meaningful stock or equipment as well as debtors. It also carries more reporting and more scrutiny than a straight invoice facility.
Why do advance rates differ between debtors, stock and equipment?
Because the classes would realise very different proportions of their book value in a sale. A trade receivable owed by a solvent customer is close to cash. Inventory has to be found a buyer, may be part finished, and may be worth far less outside your business than in it. Plant is slower again. The advance rate on each class reflects how confidently the lender could turn it into money, not what it cost you.
Who gets paid first if my business fails?
Not necessarily the lender. Where a receiver is appointed under a circulating security interest, ASIC states that money from circulating assets is applied first to the receiver’s costs and fees in collecting it, then to certain priority claims including employee entitlements, and only then to repayment of the secured creditor’s debt. Security over trading assets such as debtors and stock is generally a circulating security interest. That ordering is part of why advance rates sit where they do, and how your security is characterised is a question for your solicitor.
What reporting will the lender require?
More than any other commercial facility we arrange. Expect a regular borrowing base certificate, an aged receivables and payables listing, inventory reporting where stock is in the base, reconciliations to your accounting system, and periodic field examinations where the lender or its agent inspects the collateral and tests the ledger. That obligation is continuous and it does not relax once the facility is running.
Does Best Interests Duty apply to asset-based lending?
No. ASIC Regulatory Guide 273 states that the best interests obligations apply only to credit regulated under the National Credit Act, meaning credit provided to consumers for personal, domestic or household purposes or for the purchase or improvement of residential investment property. Asset-based lending is business purpose lending. We disclose in writing how we are paid on every transaction regardless.
Visit Us
Penrith Based.Clients Australia-Wide.
Penrith is our head office and the one you can walk into without an appointment. We also meet clients at Parramatta and in the Sydney CBD by arrangement. Asset-based facilities run alongside your bookkeeper, your accountant and your solicitor wherever they are based.
Ready When You Are
Send Us the Ledger.
An aged debtors listing and a rough stock figure. Fifteen minutes and we’ll model the eligible base the way a funder will, show you the usable limit rather than the headline one, and price the property route beside it so you can see the difference. If a base facility is not worth the cost, you will hear that first. Penrith based, clients Australia-wide. Intellect Finance Pty Ltd, ACL 390611.
Asset-based lending is business purpose lending and sits outside the consumer credit framework, so Best Interests Duty does not apply to it. We disclose how we are paid before you proceed on every transaction. Nothing on this page is credit assistance, financial advice, tax advice, legal advice or an offer of credit, and no outcome is guaranteed.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member
Important information General information only. Not credit assistance or an offer of credit. We charge you no fee. Every caveat and source on this page is collected here. Tap to read.
General information only. The content on this page is general in nature and does not take into account your objectives, financial situation or needs. It is not credit assistance, financial advice, legal advice or tax advice, and it is not an offer of credit. You should consider whether it is appropriate for you and seek your own advice before acting on it.
Nothing here is a guarantee. Loan approval, borrowing capacity, interest rates, loan to value ratios, valuations, timeframes and eligibility are determined by individual lenders and by independent valuers, not by us. Eligibility criteria, advance rates, reporting obligations and appetite are set by individual funders and vary widely. They differ between lenders and change over time. Nothing on this page indicates what any particular lender will do or offer, and timeframes are not guaranteed. Any figure, range or timeframe on this page is indicative and is not a quote, an offer, or a prediction of your outcome.
Business purpose lending. Credit provided wholly or predominantly for business purposes is not regulated consumer credit, and the Best Interests Duty and responsible lending obligations under the National Consumer Credit Protection Act 2009 do not apply to it. We disclose how we are paid in writing before you proceed on every transaction regardless.
Tax, accounting and legal. The accounting treatment of a receivables or inventory facility, whether it is presented on or off balance sheet, and the tax treatment of fees and interest depend on your circumstances and on how the documents are written. We are not tax agents, accountants or solicitors. Confirm the position with a registered tax agent, your accountant or your solicitor before acting.
Security, priority and enforcement. Whether a security interest is characterised as circulating, what it ranks against, how guarantees operate, and how a receiver would apply proceeds are legal questions with exceptions and complications this page does not cover. The ordering described here is drawn from ASIC’s published guidance and is general information only. Nothing on this page is legal advice, and your solicitor must review every facility and security document before you sign.
How we are paid. Intellect Finance does not charge borrowers a fee for arranging finance, and does not charge a clawback fee where a loan is discharged early. Lenders pay us a commission on settlement. The basis of that commission is disclosed to you in writing in our Credit Guide before any credit assistance is provided.
Third-party information. Where this page refers to government schemes, regulatory settings, tax treatment or lender policy, that information is sourced from the relevant authority and was correct to the best of our knowledge at the date shown on this page. Those rules change, sometimes without notice. Always confirm the current position with the issuing authority or with us before relying on it.
Found something wrong? If you believe anything on this page is inaccurate or out of date, tell us at joe@intellectfinance.com.au and we will review and correct it.
Intellect Finance Pty Ltd | Australian Credit Licence 390611 | MFAA Member | AFCA Member