Deals move fast. Funding should too. Asset-based lending (ABL) converts business assets into immediate liquidity – powering acquisitions and carve-outs from day one. It’s fast, flexible, and delivers both completion funding and post-deal working capital in one joined-up facility. Here’s how ABL keeps businesses moving when traditional debt struggles.
Why modern transactions need flexible funding
Traditional term debt often can’t stretch far enough – or move fast enough – to keep up with modern deals. Sellers want certainty, and buyers want to maximise leverage while preserving headroom.
Speed matters, but structure decides success. With deals moving quickly, private equity firms, corporate acquirers and mid-market businesses are prioritising funding structures that unlock the greatest flexibility and borrowing power to complete transactions efficiently and on the right terms.
Asset‑based financing offers a proven route. It unlocks liquidity tied up in receivables, plant and machinery, and property. This creates a funding base that scales with the business, adapts to the deal, and can sit alongside existing funding for greater access to working capital.
Asset-based lending’s growing role in today’s deal market
ABL is moving to centre‑stage in UK dealmaking. According to UK Finance, the average ABL advance rose 9% last year: and mid-market deals now routinely stretch into the multi-million range, reflecting bigger, more sophisticated transactions.
And with £313bn of client sales supported last year, asset‑based lending is clearly being seen as a trusted, scalable way to help transactions progress smoothly.
Where asset-based lending adds value in transactions
Every deal is unique, but most share the same challenges: tight timelines, shifting valuations, and competing priorities between buyers, sellers and funders. Asset-based lending helps smooth those edges. By unlocking value from within the business, it creates funding structures that flex with the deal rather than against it.
Acquisitions
ABL helps buyers go further by increasing available debt capacity and creating flexible structures based on existing and / or new assets that grow with the business. It can be used alongside term debt to fund completion, integration costs, and early working capital – giving buyers the breathing space to focus on performance, not cashflow pressure.
Buy & build
For businesses pursuing a phased acquisition strategy, ABL provides a rolling source of liquidity that supports multiple deals over time. Rather than starting from scratch with each acquisition,
funding scales with turnover and asset value to keep momentum between transactions.
Carve-outs
When a business is being separated from a larger group, ABL enables a clean exit for the seller and a sustainable, independent funding base for the new entity. Facilities can be structured around the assets being transferred, giving management teams immediate access to working capital from day one.
Cashflow top-ups
Not every deal fits neatly within a traditional lending model. ABL can bridge the gap between available term debt and the equity required to complete – providing that final layer of funding
that gets the deal across the line.
Why asset-based lending fits deal dynamics
ABL typically delivers higher debt capacity than traditional loans, flexes with trading, and can be structured alongside other funding sources to unlock transactions that would otherwise stall.
That flexibility matters more than ever in a market where mainstream lending appetite remains below pre-pandemic levels, and challenger lenders now hold around 60% of SME lending (UK
Finance).
With average advances and client sales on the rise , businesses and private equity firms alike are increasingly building ABL into their playbooks as a way to complete deals with confidence.
“ABL is no longer just a funding backstop: it’s a deal-maker.” – David Moran, Senior Regional Director, Ultimate Finance
Real-world example: £7.5m ABL structure powering transport group
For a global transport service solutions group, the right deal structure was the key to unlocking scale. Having supported one of its UK businesses since 2017, we already understood the debtor book, the systems and the sector dynamics. When that company was acquired to join the group, the directors wanted a single funding partner that could support both UK entities.
Working collaboratively from day one, my colleagues Regional Director Matthew Speed and Relationship Manager Matthew Richards structured a £7.5 million Invoice Finance facility, combining a new £6 million line with the existing £1.5 million facility. The solution provided:
- Flexible working capital against receivables to fund growth and new contracts
- A framework to migrate contracts between entities seamlessly over time
- A dedicated relationship team to keep the process smooth and momentum high
“The group is scaling rapidly, and they needed a funding partner that could match their pace,” says Matthew Speed. “Our track record and service-led approach meant we could deliver a competitive, flexible group solution and give them the certainty to keep moving.”
The new structure gives the group headroom to support rising UK demand while aligning with its international funding arrangements. It proves that with the right structure, funding becomes a
growth enabler and not a constraint.
The power of partnership in every deal
The best funding solutions are built on understanding. Every transaction has moving parts: from valuation pressures and timing windows to lender appetite and risk tolerance. That’s why
Ultimate Finance’s deal teams work closely with management, investors and advisers from day one: shaping facilities around what the business actually needs – not what a credit model dictates.
With direct access to decision-makers, in-house expertise across Invoice Finance, Asset Finance, Bridging Finance and Cashflow Loans, and a joined-up approach from start to finish, we help businesses move faster and succeed with confidence.
Next up: Trajectory
Turnaround and transaction are two powerful ways ABL helps businesses keep moving. But they’re not the only ones.
In the next article in this series, I’ll explore Trajectory: how businesses are using asset-based lending to fuel long-term growth, build resilience, and fund the next stage of their ambition.
