Article:

New BDO ABL Monitoring Dashboard

22 October 2015

The ABL market has grown more than threefold in the last 20 years. There are over 44,000 businesses today benefiting from this form of lending. By the end of 2014 total client sales were £292b, up 7% on the previous year, and, we’re continuing to see the same positive trend as we move through 2015.

 

Seizing the opportunity

While we believe that new products can help the industry meet its twin challenges of growing in a mature market and competing against new entrants, they also come with a health warning. Risks are nothing new to the ABL industry; it has built its success on identifying, evaluating and managing them effectively. So the key to future success may, in fact, be to look to the strengths of the past: applying the industry’s experience of traditional products to those of the future.

We have learned over the past 20 years just how expert the industry is in advancing funds against its debtors. If industry players are going to successfully lend against other assets not only does that expertise have to extend to new products, there needs to be an understanding as to the strength of the potential client you want to lend to.

However, there will be a need for ongoing monitoring of:

  • Financial position (particularly security position)
  • Financial performance
  • Future profitability
  • Cash needs
  • An understanding of managements’ capabilities and strategies

To ensure that clients are performing satisfactorily and funds in use and loans are secure, and there are no unpleasant surprises, we have developed an electronic dashboard which we have illustrated in a document to assist you with monitoring your clients.