# Asset-Based Lending vs Invoice Finance Source: https://www.cashbookfinance.co.uk/blog/asset-based-lending-vs-invoice-finance Last updated: 2026-10-03 > Asset-based lending explained - how it combines receivables, stock, plant and property in one facility, and when invoice finance alone is enough. Compare ## Asset-based lending vs invoice finance Asset-based lending (ABL) is a single facility secured on several types of business asset - usually receivables, plus stock, plant and machinery, and sometimes property. Invoice finance is the receivables part on its own. ABL suits larger businesses with significant assets beyond their invoices; for many SMEs, invoice finance is the simpler and more focused tool. Written by [Bjorn Laku](https://www.cashbookfinance.co.uk/bjorn-laku), Director & CMO. Reviewed by the Cashbook Finance lending team. **In this guide** - What an ABL facility can include - When invoice finance alone is enough - When ABL may be worth exploring ### What an ABL facility can include | Asset | Typical role in ABL | | --- | --- | | Receivables (invoices) | The core: funded like invoice finance | | Stock / inventory | Funded at a lower percentage, based on what it would realise | | Plant and machinery | Term loan against valued equipment | | Property | Term loan against commercial property | | Cash flow | Sometimes a cash-flow loan on top | ### When invoice finance alone is enough - Most of your working capital is tied up in unpaid invoices; - You have little stock, or it moves quickly; - You want a facility that grows with sales without complex asset valuations. ### When ABL may be worth exploring - Large amounts of stock or equipment that could support more borrowing; - A refinancing, acquisition or turnaround where you need to borrow against everything the business owns; - Turnover and asset values large enough to justify the monitoring and valuation costs. ### Building the equivalent from separate facilities Some businesses combine invoice finance with other specialist facilities rather than one ABL: for example invoice finance for receivables, [trade finance](https://www.cashbookfinance.co.uk/trade-finance) for stock purchases, and asset finance for equipment. See [funding options that pair with invoice finance](https://www.cashbookfinance.co.uk/blog/funding-options-with-invoice-finance). ### A practical decision test Asset-based lending is worth the complexity when stock, equipment or property could support meaningful extra borrowing. If your working capital is mostly unpaid invoices, invoice finance is simpler. #### Commercial fit Suits larger businesses with significant assets, often for refinancing, acquisitions or growth that needs more than receivables can support. #### Evidence and eligibility Expect valuations of stock and equipment, regular stock reports and field audits, as well as ledger reporting. #### Operational fit Monitoring is heavier than invoice finance alone; finance teams report on several asset classes. #### Alternatives Combine invoice finance with trade finance for stock and asset finance for equipment as separate, simpler facilities. ### Model the downside, not just the headline Model availability if stock values are marked down or equipment is revalued, since those advance rates move more than receivables. #### Where this can go wrong More security does not always mean more usable funding. Low advance rates on stock and the cost of valuations and monitoring can make the extra headroom smaller than expected. ### Questions to ask before signing - What [advance rate](https://www.cashbookfinance.co.uk/blog/invoice-finance-glossary#term-advance-rate) would apply to each asset class? - How often are stock and equipment revalued? - What reporting and audits are required? - How does the cost compare with separate facilities? ### Documents and controls to prepare Every invoice finance discussion goes better with the same core pack: a current [aged-debt report](https://www.cashbookfinance.co.uk/blog/invoice-finance-glossary#term-aged-debt-report), representative contracts and invoices with delivery or acceptance evidence, recent management accounts with a short cash forecast, and an honest schedule of credit notes, bad debts and customer concentration. We keep one maintained resource covering the full pack, the questions that surface the all-in cost, and what to monitor once a facility is live - [read the invoice finance preparation checklist](https://www.cashbookfinance.co.uk/blog/invoice-finance-preparation-checklist). This guide is general information, not a recommendation or an offer of finance. #### See what your invoices could release Tell us how your business invoices and a director will give you a straight, no-obligation view on fit - usually within a day or two. Funding #### Funding facilities that can complement invoice finance Bjorn LakuRead Costs explained #### Invoice finance costs explained Bjorn LakuRead Myths #### Invoice factoring vs a business loan Bjorn LakuRead ### Weigh each asset before choosing the structure Use the guide to organise the evidence and operating decision, not simply to compare product labels. #### Receivables Start with the sales ledger: it usually supports the highest advance. #### Other assets Stock, plant and property need valuations and add monitoring and reporting. #### Fit If receivables alone cover the need, invoice finance is the simpler structure. ### More guides on invoice finance - [Export invoice finance](https://www.cashbookfinance.co.uk/blog/export-invoice-finance) - [Recourse vs non-recourse invoice finance](https://www.cashbookfinance.co.uk/blog/recourse-vs-non-recourse-invoice-finance) - [Single invoice factoring](https://www.cashbookfinance.co.uk/blog/single-invoice-factoring) - [Supply chain finance vs invoice finance](https://www.cashbookfinance.co.uk/blog/supply-chain-finance-vs-invoice-finance) - [What makes a debtor ledger attractive](https://www.cashbookfinance.co.uk/blog/what-makes-a-debtor-ledger-attractive) - [Why invoice finance applications are declined](https://www.cashbookfinance.co.uk/blog/why-invoice-finance-applications-are-declined) --- Cashbook Finance. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Company number 10723098. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Registered with the Information Commissioner’s Office under reference ZB545200. All finance is subject to eligibility, satisfactory due diligence, credit approval and agreed terms. Invoice finance, trade finance and bridging finance may not be suitable for every business. The availability, structure, amount, pricing, fees, security requirements and completion timescales of any facility will depend on the applicant’s circumstances, the quality of the supporting evidence provided and our assessment of the proposed transaction. Any figures, examples, rates or timescales shown on this website are for illustrative purposes only and do not constitute an offer, commitment or guarantee of finance. Terms and conditions apply. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Applicants should obtain independent legal, financial and tax advice where appropriate.