Ares Commercial Finance, the commercial finance platform of Ares Management, provided a $25 million senior secured asset-based revolving line of credit to Real Good Foods, a Bolingbrook, Illinois producer of protein-focused frozen foods. The company’s CFO described ACF as its new revolving lender.

Why it matters:
The word “new” is doing the work. An incumbent revolving lender was replaced. This is a straightforward re-banking of a growth food business into a platform that underwrites the borrowing base rather than the earnings profile, which is the right structure for a company whose working capital swings faster than its EBITDA stabilises.

Ares also brings something a smaller ABL shop cannot: the ability to hold the whole facility and grow it without a syndication process.

Key risks:
Frozen inventory is harder collateral than it looks. Turns matter, shrink matters, and liquidation value depends on cold chain integrity and brand transferability. Grocery customer concentration is high in this category, and retailer deductions and chargebacks erode receivable eligibility in ways that only show up in dilution testing. Advance rates on perishable inventory need active appraisal refresh. Availability will swing seasonally. Funding growth through a revolver works until a build cycle outruns the base.

Opportunities:
Food and beverage ABL remains a reliable middle-market category with real collateral and predictable dilution behaviour once you have the data history. For managers, this is a reminder that the incumbent lender is the competitive set: winning here means offering a better-cut borrowing base, not a tighter spread.

MidCap Business Credit closed a $10 million asset-based facility for a privately held paper converter that makes custom paper products for packaging manufacturers. The structure combines a working capital revolver with an equipment term loan, refinances existing bank debt, and was sourced through MidCap’s Chicago office. The lender’s own comment is the important detail: the structure unlocked additional borrowing availability that had been constrained under the previous lending relationship.

Why it matters:
Same company, same assets, more availability. Nothing changed about the collateral. What changed was the eligibility criteria, the advance rates and the willingness to lend against equipment alongside working capital.

This is the quiet mechanism behind a large share of lower-middle-market ABL volume. Borrowers do not usually leave a bank because of price. They leave because the bank’s eligibility definitions were leaving liquidity trapped on the balance sheet.

Key risks:
Packaging demand tracks industrial and consumer shipping volumes and is cyclical. Paper input costs move sharply and pass-through lags. The equipment term loan depends on orderly liquidation values for converting machinery, which is specialised and thinly traded. Most importantly, the higher advance rests on dilution and eligibility assumptions that have not yet been tested through a full cycle with this borrower. Customer concentration in a private converter is usually higher than it first appears.

Opportunities:
Re-cutting eligibility is the most repeatable origination strategy in lower-middle-market ABL, and it requires no additional risk appetite, only better collateral analytics. For asset managers allocating to this segment, the question to ask a manager is not what they lend against but how they determine what is eligible, and how often they re-test it.

TradeCap Partners provided a $7.5 million purchase order funding facility to a Midwest importer of warehouse rack systems and carts. The company was referred by an asset-based lender who assessed that the immediate need was PO funding rather than a receivables and inventory line. The facility pays the overseas supplier against shipping documents so the borrower can fulfil large orders from a national food distributor. The company had been running on a small SBA-backed working capital line that could not carry the order size. TradeCap underwrote in two weeks and obtained a subordination from the SBA relating to the working capital assets tied to those specific customer orders.

Why it matters:
This is a three-party structure on a mid-sized private company. An ABL lender who could not do the deal referred it rather than lose the relationship. A government-guaranteed lender agreed to step back from a defined slice of collateral. A specialty funder took first position on the assets tied to named purchase orders.

The collateral is now carved by transaction, not by asset class. That is a meaningful increase in structural complexity at the $7.5 million level.

Key risks:
Performance risk sits with the overseas supplier: pay against documents and the goods still have to arrive and conform. Tariff and duty movements can change landed cost after funding. The facility depends on a single national end customer honouring the orders. The SBA subordination is scoped to specific orders, so every new order cycle raises the question of whether the carve-out still covers it. Reconciling which assets sit under which lien, order by order, is an operational burden that does not scale on spreadsheets.

Opportunities:
PO finance is the highest-yielding, shortest-duration corner of trade working capital, and referral flow from ABL lenders who cannot fund the pre-shipment gap is a durable origination channel. For managers, short-duration self-liquidating exposure with defined collateral is attractive precisely because it is operationally demanding, which keeps competition out.

SouthStar Capital closed a $3 million invoice factoring facility for a family-owned Charlotte stud welding business serving steel fabricators. Founded in 2018, the company was taking on larger structural steel projects, including data centre developments, and the gap between project completion and customer payment was creating pressure on payroll and operating costs. The referral came from an existing SouthStar client doing similar work.

Why it matters:
Trace the collateral. A $3 million factoring line in North Carolina is funding the steel that goes into data centres. The same capital expenditure cycle that produces billion-dollar syndicated facilities for power developers arrives at the bottom of the market as a receivables timing problem at a family firm.

Anyone modelling thematic exposure to AI infrastructure across a private credit book will find it distributed across positions that carry no thematic tag at all.

Key risks:
Construction receivables carry retainage, pay-when-paid terms and lien rights that complicate collection and materially change effective duration. Obligor concentration among a handful of fabricators is likely. Project delay pushes out the entire collection cycle. A business founded in 2018 has limited history through a downturn, and growth into larger projects means larger single invoices against the same equity base.

Opportunities:
Construction-adjacent factoring benefits from the infrastructure build cycle with weekly visibility into obligor payment behaviour, which is better real-time data than most credit strategies get. Client referral flow is the cheapest origination channel in factoring and tends to bring pre-screened credit.

Commercial Finance Partners closed a $750,000 accounts receivable purchase facility for a St. Louis contract security services company that had just completed a change-of-ownership acquisition financed with an SBA 7(a) loan. The acquisition was a second-generation family transition, with the incoming owner buying the business from his father and his father’s partner.

The referral came from the SBA lender itself, which wanted a working capital facility in place at closing rather than see the borrower carry more term debt. Because that lender held a blanket first lien on all business assets, the transaction required an intercreditor agreement subordinating accounts receivable and inventory to CFP while preserving the SBA lender’s first position on everything else. CFP executed the subordination concurrently with the SBA closing and funded the first advance from its own balance sheet the day after documents were signed.

Why it matters:
This is the smallest deal of the week and the most structurally involved. A $750,000 facility required a negotiated intercreditor agreement, a collateral carve-out from a government-guaranteed blanket lien, and simultaneous execution with a separate closing.

Ten years ago that level of engineering did not happen below $10 million. It does now. Intercreditor complexity has moved decisively down-market, and the operational cost of administering these facilities has moved with it.

Key risks:
Contract security is a labour business with thin margins and heavy payroll timing pressure, where a single contract loss removes a large share of the receivables base. Ownership has just transitioned, so management depth is unproven. The carve-out only covers receivables and inventory, so any dispute over what constitutes proceeds of receivables becomes a live intercreditor question. Small-obligor concentration is likely.

Opportunities:
SBA lenders are a structurally underused referral channel for working capital providers, because the guaranteed loan cannot flex to working capital needs and the lender would rather introduce a partner than watch the credit deteriorate. Lenders who can execute an intercreditor quickly and fund from their own balance sheet win business on certainty of execution, not on rate.

SouthStar Capital provided a $500,000 accounts receivable financing facility to a newly established mining supply company distributing tungsten carbide mining bits to commercial mining operations. The facility bridges the gap between delivery and customer payment.

Why it matters:
This is what day-one credit looks like for a company with no trading history. There is no balance sheet to lend against, so the underwriting is entirely about the credit quality of the mining operators receiving the goods. The obligor, not the borrower, is the risk.

Key risks:
A newly established distributor has no dilution history, no verification baseline and no evidence of how disputes are handled. Concentration will be extreme at this size. Mining capital spending is commodity-price sensitive and can stop abruptly. Consumable mining products carry low resale value if goods come back.

Opportunities:
Early-stage receivables finance is high margin and builds a data history that becomes the basis for a larger facility later. The lender who is there at $500,000 usually holds the relationship at $5 million.

1. Incumbency is the competitive set. Six of eight deals last week involved a lender who was already in the structure. Three were refinanced out, three were subordinated or carved around. Origination in this market is not about finding borrowers. It is about being able to execute against an existing lien quickly and credibly.
2. Intercreditor engineering has moved down-market. A $750,000 receivables facility and a $7.5 million purchase order line both required subordinations from an SBA lender. Structural complexity is no longer a function of deal size, and the administrative cost of a small facility is now closer to that of a large one.
3. Availability is winning mandates, not price. MidCap won by releasing availability the prior lender had constrained. Ares won by underwriting a borrowing base rather than an earnings profile. In both cases the collateral was unchanged and the eligibility logic was not.
4. Banks and private credit are co-existing on the same borrower. Lifetime Brands now has a JPMorgan-agented revolver and a Pathlight second lien maturing on the same date. This is no longer displacement. It is a division of collateral, and it requires both lenders to monitor overlapping assets under different definitions.
5. Specialty credit has absorbed the assets banks stepped away from. Transitional office in Phoenix, perishable inventory in Illinois, pre-shipment trade risk in the Midwest. None of these were financed by a bank last week.
6. Thematic exposure does not arrive with a label. A $3 million factoring facility in Charlotte is data centre exposure. Sector tags in vendor data will not find it, and neither will a quarterly report.

Every deal above creates the same operational requirement, whether it is $60 million or $500,000: collect, normalise, monitor and report on loan and collateral data, continuously, across structures that do not resemble each other.

Last week’s deals make the point precisely. One borrower now carries a first-lien ABL and a second-lien term loan against overlapping collateral. Another carries an SBA blanket lien with receivables and inventory carved out to a separate funder. A third has a purchase order facility whose priority is scoped to named customer orders. There is no single collateral position in any of these credits that can be read off a statement.

Cardo AI is the operating system for that problem:

• Loan tape ingestion across any source or format, so a factoring book, a CRE first mortgage and a syndicated revolver sit in one data model rather than three spreadsheets
• Borrowing base, eligibility and waterfall computation, run continuously rather than reconstructed monthly, so availability is a live number and not a lagging one
• Intercreditor and collateral carve-out tracking, so priority by asset class, by obligor and by transaction is explicit and auditable
• Concentration, covenant and trigger monitoring, with breaches surfaced when they happen
• Portfolio analytics and stress testing, including look-through to underlying obligors so thematic exposure is visible even when the sector tag is wrong
• Institutional-grade investor reporting, generated from the same source of truth the risk team uses
• Multi-asset-class onboarding, from commercial real estate to trade finance to lender finance

The lenders who won mandates last week did it by understanding the collateral better than the incumbent. That is an analytics advantage before it is a credit judgement.

ABL Advisor deal tables (September 7-11, 2026); company press releases via Business Wire, GlobeNewswire, PR Newswire and Bloomberg; ABF Journal; and issuer investor relations pages.