Asset Based Lending (ABL) is a form of finance which a funding source loans monies based on accounts receivable and/or inventory of a client.  This a line of credit in which accounts receivable and inventory serve as collateral. The client provides a borrowing base certificate with each loan request that shows the lender how much they have of each. The lender then advances a certain percentage against each type of collateral. Payments are made into a lockbox controlled by the funder. Rates typically have a floating rate component and a servicing charge. Usually, ABL rates tend to be below factoring rates.