PLI - Asset Based Financing Strategies 2017

Asset based financing is a key source of credit for small and medium-size companies and for some larger, publicly traded companies as well. In contrast to equity financing where ownership in the company is diluted, asset-based financing allows companies to borrow funds against their own assets as collateral to generate cash for working capital and capital acquisitions without disturbing equity ownership.

 In structuring these loans, asset-based loans are at the top of the company’s capital structure.  The loans enjoy that priority and are generally priced on that basis, because lenders rely on their collateral as their ultimate source of payment.  Accordingly, lenders and their counsel must consider all senior interests in the collateral, as well as the practical difficulties in obtaining payment in enforcement situations. Not only is a sound knowledge of the law required but also practical knowledge of the common drafting and enforcement issues likely to arise.

At this program, our expert faculty will explore the most common forms of asset-based financing, and the legal rules governing them, with particular emphasis on Article 9 of the Uniform Commercial Code and the Bankruptcy Code. In addition, the faculty will share what they have learned in representing secured creditors and borrowers in structuring asset-based loans and in enforcing them inside and outside of bankruptcy. The faculty will also discuss a number of ethical issues that arise in asset-based financings.

Commercial Finance & Lending Group Senior Counsel Scott Lessne is speaking at this event. His topic: "Receivables Financing."