Asset Based Lending Consultants: What They Do, How They Differ From Brokers, and When Borrowers Should Hire One

The phrase "asset based lending consultant" gets used loosely. It is applied to brokers who shop a one-page summary to fifty lenders, to advisors who write a thirty-page credit memorandum for two carefully chosen lenders, and to everyone in between. The work is not the same. The outcome is not the same. And for a borrower trying to place a $5M to $250M ABL facility, the choice between the two models is one of the highest-leverage decisions in the entire process.

I have spent five decades inside ABL. I wrote Asset Based Lending Disciplines — the first textbook on the discipline — and trained more than 5,000 lenders, examiners, and underwriters at GE Capital, JP Morgan Chase, Lloyds, and Barclays. SFNet recognized that work with induction into the Hall of Fame in 2021 and the Lifetime Achievement Award. What follows is the version of the consultant role that actually serves the borrower — the version we practice at Don Clarke Enterprises.

What an Asset Based Lending Consultant Actually Does

An asset based lending consultant is an independent advisor who helps a borrower navigate the placement, structuring, and ongoing management of an ABL facility. The work breaks into five disciplines, each of which we treat as a separate engagement scope:

1. Pre-Placement Diagnostic

Before any lender sees the deal, we run the borrower through an internal eligibility test. We rebuild the borrowing base from raw AR and inventory data using standard ABL eligibility rules — cross-aging, concentration, contras, foreign and federal exclusions, dilution reserves, slow-moving inventory ([ABF Journal](https://www.abfjournal.com/understanding-the-concept-and-rationale-of-standard-accounts-receivable-ineligibles/)). The output is a realistic availability number, not the optimistic one the borrower's controller built in Excel. The diagnostic also surfaces the issues that will cost availability in the field exam — see our field exam findings playbook for the most common ones.

This step alone saves borrowers months. A poorly diagnosed deal goes to market, three lenders pass, the fourth offers terms that are 30% below the borrower's expectation, and the borrower spends another 90 days re-negotiating from a position of weakness. A diagnosed deal goes to market with a realistic availability range and credible terms expectations, and lenders treat it accordingly.

2. Credit Memorandum and Deal Packaging

The credit memorandum is the document the lender's underwriting committee reads. A good one is thirty to fifty pages: business overview, industry positioning, management team, historical financials with normalizing adjustments, projections with downside cases, collateral analysis built from real loan-tape data, eligibility waterfall, proposed structure, lender ask. A bad one is a teaser deck.

The difference matters because credit committees do not have time to build the memorandum themselves. If the borrower-side package is incomplete, the lender's analyst rebuilds it — slowly, sometimes incorrectly, and always with the lender's worst-case assumptions baked in. A polished, accurate, lender-format credit memorandum compresses the path to term sheet from sixty days to three weeks. We covered the document architecture in our ABL credit package article and the supporting documentation list in our due diligence checklist.

3. Lender Introduction and Process Management

The consultant's job here is two-sided. On the borrower side, identify which two to five lenders are the right fit — by asset class appetite, deal size range, industry comfort, geography, and current pipeline capacity. On the lender side, introduce the deal in the right format to the right credit officer, not the random business development rep listed on a directory page.

We introduce borrowers to lenders. We do not negotiate term sheets on the borrower's behalf — the borrower signs the term sheet, and the borrower's counsel reviews it. We advise on which terms matter, where the market sits, and where the lender is likely to flex. We have placed deals with every major bank-owned ABL group (Wells Fargo Capital Finance, JP Morgan Asset-Based Lending, Bank of America Business Capital, PNC Business Credit, BMO Sponsor Finance, MUFG) and with every meaningful non-bank lender (Gordon Brothers, SLR Credit Solutions, Encina Business Credit, Crystal Financial, Second Avenue Capital Partners, Great Rock Capital). We know which one wants which deal. Our lender selection framework is here.

4. Field Examination and Underwriting Advisory

Once the term sheet is signed and the deal enters confirmatory diligence, the borrower runs into the field exam and the lender's third-party appraisal of inventory. Both can take 8% to 22% of stated AR off the borrowing base if the borrower is not prepared. We covered the prevention playbook in detail in the field exam findings article and the borrower-side prep work in the first field exam playbook. Inventory NOLV and FLV mechanics are in the appraisal guide.

The Asset Based Lending Consultants (ABLC) team I founded is the lender-side field examination operation that performs this work for many of the largest ABL lenders worldwide. We see both sides of the exam. We know what the examiners look for because, in many cases, we trained them.

5. Post-Closing Borrowing Base and Renewal Advisory

The consultant role does not end at funding. The borrower still has to produce a borrowing base certificate every month or every week. They still have to track availability against covenants. They still face a renewal in two to three years. We advise on the borrowing base mechanics, troubleshoot eligibility shifts as the business changes, and run the renewal as a deliberate process — incumbent renewal versus market RFP — when the time comes. See our refinancing playbook for the renewal economics.

How a Consultant Differs From a Broker

The market uses the words interchangeably. They are not the same.

A loan-shopping operation — what some refer to as a commercial loan broker — typically operates on a transactional model: take a one-page summary, blast it to a wide list of capital sources, take a success fee on whichever deal closes. The economics push toward volume, not fit. The borrower may end up with a facility, but rarely the right one. And in most US states, the activity is unlicensed and unregulated outside of a handful of jurisdictions like Arizona, California, Nevada, North Dakota, and Nebraska that require formal commercial loan broker licensing ([Integrity Mortgage Licensing](https://integritymortgagelicensing.com/lists-of-licensing-requirements/commercial-loan-licensing/), [Janover](https://janover.pro/guides/licensing-and-regulatory-requirements-for-cre-mortgage-brokers)).

An asset based lending consultant — at least as we practice the role — operates on an advisory model. The deliverable is the diagnostic, the memorandum, the lender-fit analysis, and the deal management work. Compensation is on an advisory-fee basis, not a transaction-based success fee from lenders. The selection of lenders is driven by credit fit, not by which lender pays the highest referral. The borrower keeps full control over the term sheet, the lender relationship, and the closing decision. The lender makes the credit decision; we never solicit, broker, or receive transaction-based compensation from any lender on the introduction.

For full disclosure of our advisory-only positioning and the regulatory categories we do not occupy, the process and services pages of our site lay it out plainly. We are not licensed as a broker-dealer, investment adviser, mortgage broker, commercial loan broker, or finder.

When Borrowers Should Engage a Consultant

Not every borrower needs one. The decision turns on five factors:

• Deal size. Facilities below roughly $5M are usually served well by direct lender relationships and a competent CFO. Above $5M, the credit packaging complexity rises quickly and the consultant value increases. Above $25M, the consultant is almost always net-positive.
• Industry complexity. Healthcare receivables (Medicare/Medicaid lockbox, third-party payor rules — see our healthcare ABL article), government contractors (Assignment of Claims Act — covered here), staffing companies (payroll funding mechanics), cross-border receivables, and IP-collateralized deals all reward specialized advisory help. Generic working-capital ABL for a domestic distributor is simpler.
• Borrower experience. First-time ABL borrowers nearly always benefit from a consultant. Repeat borrowers with experienced CFOs and a strong incumbent lender relationship may be able to manage a renewal in-house, but should still bring in advisory help when going to market for a new lender.
• Time pressure. Deals on a deadline — acquisition financing, refinancing of a maturing facility, distressed situations — are where packaging discipline saves the most time. We covered acquisition financing structuring in our leveraged buyout ABL article and DIP financing in the Chapter 11 DIP guide.
• Lender-relationship risk. Borrowers exiting a difficult incumbent lender (covenant breach, restrictive cash dominion, advance-rate cuts) benefit substantially from advisory because the new lender will read the file critically. See our cash dominion article and the why deals get declined article.

What to Look for in an Asset Based Lending Consultant

If you are evaluating consultants — including evaluating Don Clarke Enterprises against alternatives — these are the questions that matter:

1. Have they actually built credit memoranda in lender format? Ask for redacted samples. The format gives away whether the consultant has done the work or is repackaging templates.
2. Do they have direct working relationships with the lender credit officers, not just business-development reps? Ask for the names of the credit officers they would route the deal to. A real consultant can name them.
3. Are they compensated by the borrower or by the lender? If the consultant receives transaction-based compensation from the lender, the selection bias is inherent. The best practice is advisory-fee compensation paid by the borrower.
4. Do they have field exam fluency? The single largest source of post-term-sheet erosion is field exam findings. A consultant who cannot speak to cross-age, concentration, contras, dilution, and inventory variance in detail is going to leave availability on the table.
5. What is their authority in the ABL industry? Look for SFNet involvement, published writing, training credentials, and lender-side relationships. Asset based lending is a small industry. Reputation is everything.

What We Do Differently at Don Clarke Enterprises

We advise. We help borrowers prepare credit-ready packages. We introduce borrowers to the lenders we believe fit the deal. We stand alongside the team through field exam, appraisal, and closing diligence — though final credit, underwriting, and funding decisions are made by the lender, not by us.

We charge advisory fees, not transaction-based commissions from lenders. We do not solicit lenders on the borrower's behalf in the brokerage sense. We do not negotiate term sheets — we advise on them. We do not promise outcomes; we promise process discipline that materially improves the probability and quality of the outcome. For full positioning, see the services overview and the process page.

The breadth of work this draws from is unusual. The textbook (Asset Based Lending Disciplines) is the standard reference for the discipline. The training curriculum has been delivered to GE Capital, JP Morgan Chase, Lloyds, Barclays, and most of the other major ABL platforms over four decades. The 2021 SFNet Hall of Fame induction and Lifetime Achievement Award reflect that body of work. And the parallel work at ABLC — the field examination service provider serving the largest ABL lenders worldwide — gives us a continuous, current view of how lenders actually underwrite, examine, and monitor these deals.

The Honest Answer to "Do I Need a Consultant?"

For a $3M ABL facility from an incumbent lender on a clean renewal, probably not. For a $30M new-money placement, an acquisition-financing structure, a stretch ABL on top of asset-light collateral (see the stretch ABL article), or a borrower exiting a difficult lender, the consultant should pay for themselves several times over in placed terms, preserved availability, and time saved. The marginal cost of advisory is small relative to the marginal value of a tighter spread, a higher advance rate, and a cleaner field exam.

If you are considering a placement and want a realistic read on whether your deal is ready for market, we will tell you straight. Submit the situation and we will respond inside 24 hours.