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Navigate ABL transactions with ease through our new tailored solution

Successfully managing Asset-Based Lending (ABL) transactions demands expertise and continuous attention. Lacking the appropriate technology makes it difficult to efficiently analyze extensive data sets, leading to delays in decision-making and hampering adaptability to market shifts. That’s where Cardo AI’s new ABL solution steps in, mitigating inaccuracies in asset tracking, covenant management, and collateral monitoring.

What’s in it for you?

  • Save operational costs by using our solution to manage, execute and report your ABL transactions. 
  • Win more ABL deals with a faster bidding strategy, enabled by our solution. 
  • Increase the probability to reach your fund return targets, even with complex ABL transactions, regardless of your private credit investment strategies. 
  • Enhance data intelligence across all investment strategies and leverage data from ABL transactions. 
  • Boost funding allocation by improving transparency for institutional investors.

Why does it matter?

Navigating Asset-Based Lending (ABL) can be complicated for several reasons:

  • ABL transactions are complex, involving intricate financial structures like revolving credit lines, term loans, and asset-based loans.
  • ABL agreements impose strict covenants to safeguard lenders’ interests, often encompassing financial ratios, performance metrics, and activity restrictions.
  • collateral displays diversity, from accounts receivable and inventory to machinery and equipment, encompassing various asset types.
  • collateral values may fluctuate over time, posing challenges in accurately assessing and monitoring asset dynamics.
  • ABL transactions must comply with stringent regulatory and legal frameworks, adding complexity to facility and collateral management.

How does it work?

By centralizing both facilities and collateral data and integrating advanced monitoring capabilities, our ABL solution helps predict cash flow and analyze scenarios, giving crucial insights into borrower and collateral performance. Here’s top 5 features:

  1. customize your facilities with our Facility Module: tailor settings according to your needs and configure diverse facility types with ease in a flexible environment (automatically calculate expected payments and interest accruals, set margin ratchets and triggers).
  2. simplify funding requests with our Workflow Manager: facilitate a smoother funding process tailored to the unique requirements of each agreement.
  3. ensure accurate funding requests with our Borrowing Base: verify eligibility and concentration limits effortlessly, and ensure the correct application of advance rates. track borrower performance easily with Borrowers Monitoring: simplify the standardization of borrowers’ financial data and gain insights into borrower behavior and financial health to make informed lending decisions.
  4. easily manage covenants with Covenants Tracking: perform automated borrower compliance checks, enabling precise monitoring of financial and operational covenants. Receive early alerts for potential breaches, empowering borrowers to rectify issues promptly.
  5. stay organized with transaction events: track all contractual events conveniently in one place. Stay updated on upcoming borrower deliverables and effortlessly sync transaction events with your calendar for improved organization and efficiency.

Use case

Background: Our client, a leading asset manager based in the UK, is providing funding to an originator of consumer loans through an asset-based revolving facility. The company has traditionally struggled with the complexities of ABL transactions due to diverse collateral types, fluctuating asset values, and intricate covenant conditions.

Challenge:

  • Data Management: Extensive datasets involving diverse collateral types (like machinery, inventory, and accounts receivable) were cumbersome to manage and analyze, leading to potential inaccuracies in asset tracking.
  • Decision Delays: Keeping track of the thousands of loans and ensuring a correct determination of the eligible criteria, as well as the correct calculation of excess concentrations and advance rates through Excel was delaying the ability of the asset manager to provide funding on time. 
  • Regulatory Compliance: Maintaining compliance with strict ABL regulatory and legal frameworks was resource-intensive.
  • Operational Costs: High operational costs were incurred due to the manual and fragmented approach to facility and collateral management.

Solution: The company decided to implement Cardo AI’s ABL solution to overcome these challenges. Our software has enabled them to digitalize the entire credit agreement, providing a centralized platform to manage the facility details and collateral data. The deployment focused on several key features of the technology:

  • Facility Module: Customizing facilities to cater to diverse financing structures and automatically calculating expected payments and interest, which streamlined financial management.
  • Workflow Manager and Borrowing Base: These tools facilitated smoother and more accurate funding processes, enhancing the company’s ability to manage cash flows and maintain lender confidence.
  • Borrowers Monitoring and Covenants Tracking: By standardizing financial data and automating compliance checks, the company could now proactively manage borrower behavior and covenant compliance, reducing the risk of breaches.
  • Data Integration: Leveraging advanced monitoring capabilities and data intelligence tools provided by Cardo AI’s solution enabled the company to gain crucial insights into borrower and collateral performance.


Ready to take your ABL transactions management to the next level? Request a demo here to see the new solution in action.