Overview

The AFS Asset-Based Lending (ABL) module facilitates the management of specialized loans that require intensive collateral monitoring, particularly accounts receivable and inventory loans. Asset-based lending focuses on the assessment of constantly changing receivables and inventory values; therefore, the system has been designed with advanced online monitoring of the factors affecting disbursements and collateral worth, such as inventory, receivables aging, sales, remittances, and float.

A hallmark of AFS' design is its flexibility, providing the ability to define commitment structures, collateral requirements, and monitoring criteria—while maximizing revenue opportunities through interest calculation and fee assessment options. Because it is fully integrated with the AFS loan accounting system, the ABL module offers the ability to provide audit schedules, reports on client availability, account and loan status, and net position summaries to mitigate credit, market, and operational risk.

Benefits

The AFS Asset Based Lending Module provides value by enabling a bank to manage risk, cut costs, and generate additional revenue:

	Manage Risk:
	—   Credit risk by identifying under-collateralized assets (deterioration in receivables, for example) to adjust credit facilities and avoid credit losses —   Operational risk by ensuring systematic monitoring of receivables and inventory. Customer-supplied data on receivables and inventory are automatically tracked and adjusted; tight control of collateral is maintained through user-defined aging parameters and daily sales and remittance tracking. The ABL module enables verification of collateral valuation prior to funds disbursement.
	Cut Costs: Because the ABL module is part of the fully integrated processing construct unique to AFS, implementation, operating, and maintenance costs are reduced. Additionally, interfaces with other accounts receivable systems are unnecessary, which reduces operational overhead.
	Generate Revenue: the ABL module maximizes revenue opportunities through its ability to support a broad range of interest and fee assessment options, providing pricing flexibility to deal with diverse customer requirements. For example, the float fee-processing feature enhances income by providing the ability to assess charges on principal payments made by checks drawn upon another financial institution.

Features

The AFS ABL module features:

	Trend analysis and performance ratios
	The ability to accommodate:
	—   Multilevel commitments —   Shared facilities —   Temporary overlines
	Accruals and flat fees processed with full FASB 91 compliance
	Full integration, which permits use of other AFS Level IIIT Loan Accounting System features.
	Collateral types that include:
	—   Accounts receivable. —   Associated processing features of accounts receivable (bulk, formula). —   Inventory (raw materials, work-in-progress, finished goods, user-defined categories)
	Float fees based on payment origination that can be assessed on:
	—   Business day —   Calendar day —   Portion of a day