Asset-Based Lending

About The Author

Preface

What This Book Will Do for You

1. WHO CAN BENEFIT FROM THIS GUIDE

CHAPTER 1 - Asset-Based Lending and Collateral Controls: An Overview

1. 1.1 INTRODUCTION
2. 1.2 ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE (UCC)
3. 1.3 ELIGIBLE RECEIVABLES
4. 1.4 INELIGIBLE RECEIVABLES
5. 1.5 ELIGIBLE EXECUTORY CONTRACTS
6. 1.6 INELIGIBLE EXECUTORY CONTRACTS
7. 1.7 ELIGIBLE NOTES
8. 1.8 INELIGIBLE NOTES
9. 1.9 ELIGIBLE CHATTEL PAPER
10. 1.10 INELIGIBLE CHATTEL PAPER
11. 1.11 ELIGIBLE DOCUMENTS
12. 1.12 INELIGIBLE DOCUMENTS

CHAPTER 2 - Investigating the Borrower

1. 2.1 MEASURING RISK
2. 2.2 OBTAINING PRELIMINARY INFORMATION ABOUT THE BORROWER

CHAPTER 3 - Setting the Amount and Price of the Loan

1. 3.1 QUALITY OF COLLATERAL AND BORROWER
2. 3.2 BORROWING BASE
3. 3.3 COLLATERAL MARGIN
4. 3.4 UNSECURED LOANS
5. 3.5 CROSS-COLLATERAL OR DRAGNET CLAUSES
6. 3.6 INTEREST RATES AND FEES

CHAPTER 4 - Cash Collateral Accounts, Commingling Funds, and Controlling Payments and Advances

1. 4.1 SETTING UP CASH COLLATERAL ACCOUNTS
2. 4.2 COMMINGLED FUNDS
3. 4.3 BLOCK ACCOUNTS
4. 4.4 CONTROLLING PAYMENTS
5. 4.5 METHODS OF HANDLING ADVANCES

CHAPTER 5 - Completing Notes, Security Agreements, and Other Documents

1. 5.1 PREPARING DOCUMENTS—AN OVERVIEW
2. 5.2 ASSUMED NAMES
3. 5.3 BORROWING RESOLUTIONS/AUTHORIZATIONS
4. 5.4 NOTE FORMS
5. 5.5 SECURITY AGREEMENTS
6. 5.6 ASSIGNMENT OF RELATED COMPANY ASSETS
7. 5.7 LETTER/LOAN AGREEMENT
8. 5.8 GUARANTY AGREEMENTS
9. 5.9 CORPORATE RESOLUTION OR PARTNERSHIP AUTHORITY/AFFIDAVIT FOR GUARANTIES AND COLLATERAL PLEDGES AND ASSIGNMENTS
10. 5.10 SUBORDINATION AGREEMENTS
11. 5.11 ASSIGNMENT OF LIFE INSURANCE POLICY

CHAPTER 6 - Perfecting the Security Interest

1. 6.1 THE SECURITY INTEREST—AN OVERVIEW
2. 6.2 FILING REQUIREMENTS FOR FINANCING STATEMENTS
3. 6.3 TAX LIENS JUDGMENTS

CHAPTER 7 - Accounts Receivable Lending

1. 7.1 INTRODUCTION
2. 7.2 NON-NOTIFICATION RECEIVABLE FINANCING
3. 7.3 COLLATERAL CONTROL PLANS FOR NON-NOTIFICATION FINANCING
4. 7.4 NOTIFICATION RECEIVABLE FINANCING
5. 7.2 USE OF AN INDEPENDENT THIRD- PARTY SERVICE COMPANY FOR MONITORING THE COLLATERAL
6. 7.6 COMPETING SECURITY INTERESTS
7. 7.7 MAINTAINING THE LOAN-TO-COLLATERAL RATIO
8. 7.8 THE BORROWING BASE CERTIFICATE (REPORT)
9. 7.9 MONTHLY AGINGS OF ACCOUNTS RECEIVABLE
10. 7.10 MONTHLY AGINGS OF ACCOUNTS PAYABLE
11. 7.11 ASSIGNMENT SCHEDULES
12. 7.12 COLLECTION SCHEDULES
13. 7.13 CHECKLIST OF BORROWER RESPONSIBILITY
14. 7.14 CHECKLIST OF NOTE OR SUPPORT DEPARTMENT STAFF RESPONSIBILITY
15. 7.15 CHECKLIST OF LOAN OFFICER S RESPONSIBILITY
16. 7.16 ASSIGNMENT SCHEDULE COMPLETION
17. 7.17 COLLECTION SCHEDULE COMPLETION

CHAPTER 8 - Executory Contract Lending

1. 8.1 EXECUTORY CONTRACT LOANS
2. 8.2 LENDING ON EXECUTORY CONTRACTS
3. 8.2 NOTIFICATION OF ASSIGNMENT
4. 8.4 TRADE CONTRACTOR FINANCING
5. 8.5 U.S. GOVERNMENT CONTRACTS FOR MILITARY GOODS AND SERVICES
6. 8.6 MUNICIPALITY CONTRACTS

CHAPTER 9 - Inventory Lending

1. 9.1 INTRODUCTION
2. 9.2 EVALUATING INVENTORY AS COLLATERAL
3. 9.3 INVENTORY LOANS
4. 9.4 FINANCIAL QUALIFICATIONS OF THE BORROWER
5. 9.5 SPECIAL FILING/CERTIFICATE REQUIREMENTS AND PROBLEMS
6. 9.6 CONTROLLING INVENTORY COLLATERAL
7. 9.7 QUALITY OF INVENTORY COLLATERAL
8. 9.8 PROTECTING INVENTORY COLLATERAL
9. 9.9 PROTECTING THE PRIORITY OF YOUR LIEN
10. 9.10 CONSIGNED INVENTORY

CHAPTER 10 - Chattel Paper, Notes, Machinery, and Equipment Financing

1. 10.1 CHATTEL PAPER
2. 10.2 PERFECTING COLLATERAL INTEREST IN CHATTEL PAPER
3. 10.3 NOTES
4. 10.4 ESTOPPEL (NOTIFICATION) LETTERS
5. 10.5 BASIC CONSIDERATIONS WHEN LENDING AGAINST CHATTEL PAPER AND NOTES
6. 10.6 LENDING AGAINST MACHINERY AND EQUIPMENT (M&E)

CHAPTER 11 - Third-Party Leasing

1. 11.1 INTRODUCTION
2. 11.2 FINANCIAL CONDITIONS OF LESSORS AND LESSEES
3. 11.3 FILING FINANCING STATEMENTS ONLY FOR NOTIFICATION PURPOSES
4. 11.4 ACCOUNTING METHODS
5. 11.5 THIRD-PARTY LEASES

CHAPTER 12 - Direct-Lease Financing

1. 12.1 INTRODUCTION
2. 12.2 DIRECT LEASES

CHAPTER 13 - Factoring

1. 13.1 INTRODUCTION
2. 13.2 FACTORING NEW CLIENTS
3. 13.3 FACTOR FINANCING

CHAPTER 14 - Outside Collateral Field Examinations

1. 14.1 AUDITS OF BORROWERS RECORDS
2. 14.2 AUDIT CONFIRMATIONS (VERIFICATIONS)

CHAPTER 15 - Loan Relationship Transfers, Liquidations, and Files

1. 15.1 LOAN RELATIONSHIP TRANSFERS
2. 15.2 LOAN LIQUIDATIONS
3. 15.3 FILES
4. (2) Record Retention

CHAPTER 16 - Dealing with Asset-Based Borrowers Under the Bankruptcy Code

1. 16.1 INITIATING A PETITION
2. 16.2 CREDITOR MEETINGS
3. 16.3 AUTOMATIC STAYS
4. 16.4 ADEQUATE PROTECTION
5. 16.5 VOIDABLE PREFERENCES
6. 16.6 CHAPTER 11

Appendix

1. Due Diligent Necessities Regarding ABL:
2. Borrowing Base Reports
3. Eligible Account Receivable for Borrowing Base Purposes
4. Ineligible Accounts Receivable for Borrowing Base Purposes
5. Ineligible Inventory for Borrowing Base Purposes
6. Pre-Loan Surveys and On-Going Collateral Field Examinations
7. A/R summary based on terms and reconciliation to financial statements
8. Recommendations
9. General
10. Accounts Receivable
11. Notes Payable
12. Taxes
13. Inventory
14. Types of Equipment Appraisals