Asset-Based Lending is a form of commercial financing in which a loan or line of credit is secured by a borrower’s assets; most commonly accounts receivable, inventory, and sometimes fixed assets. The lender relies heavily on the quality, performance, and liquidation value of these assets to determine borrowing availability.

The borrowing base is continually monitored and adjusted based on changes in collateral value. Because ABL structures depend on real, verifiable collateral, lenders regularly perform field exams (collateral audits) to assess accuracy, internal controls, and recoverable value.