Distressed lending

Distressed lending typically provides credit facilities to borrowers with good cash generation capacity but short-term liquidity issues.

Liquidity lending versus collateral lending

Distressed loans typically take the form of bridge or Mezzanine capital or similar hybrid structures and often place the distressed lender in a better position than existing common shareholders and lenders with respect to company's assets and cashflow.

Versus asset backed lending ("ABL")

Distressed lending can be contrasted with asset backed lending in that ABL typically provides collateralized credit facilities to borrowers with high financial leverage and marginal cash flows. ABL's primary focus is on collateral and liquidity with leverage and cash flow being secondary considerations. Borrowings under an asset-based facility are limited by the collateral base, which is measured by liquidation value of accounts receivable, inventory and fixed assets rather than by reference to direct, ongoing cash generation capacity.

gollark: ***PRAISE ADVANCED MICRO DEVICES***
gollark: See, praise AMD; even Bwhatevers can still overclock, and my 2017 B350 board will probably support new CPUs for another year or so.
gollark: You would just lose overclocking.
gollark: Which an H or B one could also do.
gollark: That would be some sort of B or H-series one.

See also

References
    This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.