Asset Based Lending (ABL) is a popular method banks use to create Credit Facilities for its business customers. As the name implies a company's assets are used as collateral to generate cash for working capital purposes.  Most assets a customer has can be utilized for collateral  lending purposes such as accounts receivable, inventory, fixed assets, real estate, cash or cash equivalents, etc.

Banks generally categorize ABL prospects by levels of risk,  financial strength  and the quality and merchantability of the assets being pledged.  Commercial Finance lenders (hard asset lenders) and Factorers generally lend to financially weaker companies, which inherently entails a higher level of risk than financially healthier Bank Asset Based Lending borrowers. The procedures for creating facilities and processing the loans are similar, however the level of risk, monitoring and frequency of reporting ultimately impacts the credit limits granted, collateral values assigned, interest and fees charged as well as the level of monitoring and frequency of audits performed.

Premium Technology Inc. has a unique and flexible financing solution which allows banks to support all  types of lending involving trading assets  (accounts receivable and inventory), fixed assets, real estate, cash or cash equivalents, etc.

Premium Technology's software solution was designed to provide banks with the capability of supporting all types of asset based facilities. Our solution allows the lender to track, monitor and value the collateral used in the creation of a credit facility or a revolver loan. The system also tracks and monitors all payments, sweeps, and term loans which may appear on borrowing based certificates.

Assets tracked, and monitored as part of the collateral valuation process are:

• Streamlined or formula based accounts receivable financing;
• Inventory financing with attendant sub categories, i.e., raw materials, work in process and finished goods, as well as inventory in-transit;
• Fixed assets with sub categories such as plant and fixtures, equipment, real estate, etc;
• Cash or cash equivalents including sub categories such as cash, securities, time deposits, Bonds, etc;
• Dealer floor plans; and,
• Factoring

Reason to use Premium Technology's ABL system

• Lowers risk
• Lowers operating expenses and expedites auditing process
• Provides customers with tools to easier understand ABL process
• Provides working capital on a fast turnaround basis

Premium Technology's ABL solution includes two addition modules; a collection module and a risk management module.

The Collection module allows for the reconciliation and tracking of payments, sweeps and credits. Periodic payments or credits towards collateral or loans will affect not only the value of the ABL facility, but the dilution of a customer's credit.

Our Risk Management module interfaces to the bank's risk and credit management systems. Because Premium's ABL system tracks both the buyer's as well as the seller's information, the bank will be checking both for credit and compliance issues.

Premium Technology utilizes the newest technologies such as J2EE, Java, etc. The design of the system includes a Web interface which allows customers to load data and other information directly into its software. This is a time saving process, which also increases and simplifies information movement and enhances the audit process.

• Ratios
• The application of checks the borrower submits, as well as compliance/adherence to Credit, OFAC, Patriot Act and AML regulations
• Warehousing invoice excesses
• Checks for duplication of invoices submitted
• Automated uploading capabilities via web interface
• Online negotiation/collaboration between customer and bank as to values assigned and information required

Information Flows

• Creation of all documents a bank needs to set up an ABL customer
  
• Automated upload of borrower assets
• Online or printed reports of customer's upload
• An online or printed report of assets accepted or not accepted by the bank. (Items not accepted could be duplicate invoices, bad credit rating of the buyer being on OFAC's list, etc.)
• An online or printed report of the banks valuation of assets
• Creation of the "Borrowing Based Certificate"
• Track and value all of customers assets or Liabilities:

• Accounts receivable and supporting invoices
• Inventory valuation and performance
• Equipment and term loans
• Real estate, and/or other fixed assets
• Cash and cash equivalents
• Payments

• Buyer/Seller experience rating database
• Automated checking of Borrower's Customer
• Automated uploading of Assets
• Online customer view/access of processes and ongoing status
• Real-time and online reporting
• Tracking of all items, including payments at the lowest granular level
• Complete dilution reporting