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How does asset-based lending work in Canada?


Andrew Biderman, Chair of our Banking & Financial Services Group, was quoted in a recently published Lexpert article titled, "How does asset-based lending work in Canada?"

Emerging businesses may have assets of different types at their disposal but are low on capital and cash. This makes it difficult for them to fully operate without sacrificing some of their potential or foregoing an important aspect of their business.

As a solution, they may have heard about asset-based lending. How does asset-based lending work, and what are its advantages and risks? More importantly, which Canadian laws apply to asset-based lending? We’ll cover that and more in this article.

How asset-based lending works

Asset-based lending is a type of loan, or a line of credit, where a creditor (such as a bank or financial institution) grants a loan to the debtor (the borrower) based on the security or collateral being offered.

“Asset-based lending is financing made available primarily based on the current value of the assets that a borrower grants to the lender as security,” said Andrew Biderman, partner and chair of Torkin Manes LLP’s banking & financial services group.

Read the full article on Lexpert's website.