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Home / Asset-Based Lending
The Risks of Asset-Based Lending
The asset-based lending (ABL) market in the United States is responsible for around $100 billion dollars worth of financing every year. It is one of the largest—and riskiest—commercial lending markets. Financed by either accounts receivable or inventory, asset-based loans are subject to legal disputes at any stage of the relationship—from the initial credit evaluation to the origination, administration, and liquidation stages.
Litigation Complexities
Sorting out ABL disputes in court is costly and time-consuming. Add complexities such as transfer of rights issues, account assignments, conflicting security interests and/or competing claims on the secured assets, and both parties could suffer through an even costlier litigious battle lasting for years in the court system.
The ADR Solution
Alternative dispute resolution (ADR) is a more efficient, predictable and amicable way of resolving disputes and achieving legal decisions without the expense and delays of traditional litigation. More and more asset-based borrowers and lenders are taking advantage of the cost- and time-saving benefits of ADR while enjoying the same recovery opportunities as court. With ADR, risks are minimized, business relationships are preserved, and everyone’s bottom line benefits with a swift, legal resolution.
Let the FORUM Help
The FORUM can develop an ADR solution to suit your particular asset-based lending needs. When disputes arise, you can take comfort in knowing that our arbitrators and mediators possess commercial finance expertise and an expert knowledge of the applicable lending and finance law. For a better dispute management program, contact us today.
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