How it works
Using an ABL format, Worthy Lending will periodically get copies of invoices from its borrower along with a current accounts receivable aging report.
Generally, Worthy Lending will lend up to 70%-80% of the total eligible net value of all invoices not older than 90 days. The account debtors (customers) responsible for paying these bills must be credit worthy, and numerous (not usually just one single customer).
Account debtors will pay to the account of Worthy Lending as is typical in all receivables-based finance.
Borrowers, upon having ample additional/new receivables as collateral, can then re-borrow and continue to use the availability as a revolving line. Receivables based ABL finance should not be confused with Factoring in which the borrower actually “sells” the invoices to the lender (factor).