easy · Corporate Credit Analysis
How does an 'Asset-Based Loan' (ABL) typically determine the amount a borrower can draw?
- Based on the amount of common equity the sponsor has contributed to the deal.
- By calculating the total enterprise value of the firm using an EBITDA multiple.
- Through a 'borrowing base' formula linked to eligible accounts receivable and inventory.
- By checking the borrower's latest credit rating from S&P or Moody's.
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