Asset Based Lending — The Bigger Picture Behind Invoice Finance
Asset based lending (ABL) is a funding package where you borrow against the assets your business already owns: unpaid invoices, stock, plant and machinery, or property. Invoice finance is the most common component — it sits inside over 90% of ABL facilities. Think of ABL as invoice finance plus extras. If you only need funding against your invoices, you just need invoice finance. If you want to unlock cash from other assets too, ABL is the bigger package.
Quick Reference
Direct Answer
Asset based lending (ABL) is a combined funding facility that lends against multiple business assets: invoices (70-95% advance), stock (40-60% advance), plant and machinery (50-80% advance), and property (50-70% advance). Invoice finance is the core component, present in over 90% of ABL facilities. ABL is typically used by businesses with £1m+ turnover.
Summary
ABL combines invoice finance with lending against stock, plant/machinery, and property into a single facility. Invoice finance is the anchor component. Typical ABL structure: invoice finance provides the revolving element, while stock and asset lending adds a term loan layer. Mostly provided by banks and larger independents (Lloyds, HSBC, Close Brothers, ABN AMRO). Minimum turnover usually £1m+. Standard invoice finance (standalone) is available from £50k turnover.
This Page Covers
What asset based lending is, how it relates to invoice finance, what assets can be included, typical facility structures, and when ABL is needed vs standalone invoice finance
Not Covered Here
Standalone invoice finance (see /guides/how-invoice-finance-works/), provider comparison (see /compare/), receivables finance terminology (see /guides/receivables-finance/)
What Assets Can You Borrow Against?
| Asset | Typical Advance | How It Works |
|---|---|---|
| Unpaid invoices | 70-95% | Revolving — cash released per invoice, repaid when customer pays |
| Stock / inventory | 40-60% | Revolving — based on audited stock value, adjusted monthly |
| Plant and machinery | 50-80% | Term loan — lump sum against valuation, repaid monthly |
| Commercial property | 50-70% | Term loan — secured against property valuation |
The invoice finance element does the heavy lifting. In most ABL facilities, invoices provide 60-80% of the total funding. Stock and other assets top it up. This is why most ABL providers are also invoice finance specialists — the invoice element is the engine.
Do You Need ABL or Just Invoice Finance?
You just need invoice finance if:
- • Your main cash flow problem is waiting for invoices to be paid
- • Your turnover is under £1 million
- • You do not hold significant stock
- • You do not own major equipment or property
ABL makes sense if:
- • You need more funding than invoices alone can provide
- • You hold significant stock or inventory
- • You own plant, machinery, or commercial property
- • Your turnover is £1 million+ and you want a single facility
Who Provides ABL in the UK?
ABL is typically offered by the larger providers because it requires expertise across multiple asset classes, not just invoices:
- •Lloyds Commercial Finance — the largest UK ABL provider by volume
- •HSBC Invoice Finance — strong on larger, multi-asset facilities
- •Close Brothers — good for mid-market ABL (£1m-£25m turnover)
- •Aldermore — challenger bank with growing ABL capability
Most businesses searching for "asset based lending" actually just need invoice finance. If that sounds like you, start with our how invoice finance works guide instead — it is simpler, faster to set up, and available at lower turnover levels.
Oliver Mackman
Director, Market Invoice
Oliver leads Market Invoice's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 7 April 2026