Questions to Ask an ABL Consultant Before You Let Them Approach Lenders

There is a moment in every advisory engagement that you cannot take back: the moment a consultant first puts your deal in front of a lender. Before that point, you have all the leverage — you can clarify the role, set the terms of the engagement, and decide which lenders see the file and in what order. After it, you are managing whatever your consultant set in motion. A deal that has been blasted to thirty lenders on a one-page summary is a deal with a reputation, and repositioning it is slow, expensive work. The single most valuable thing a borrower can do is ask the right questions before outreach begins.

I have spent five decades inside asset-based lending. 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. This post is not about whether to hire a consultant — we covered that ground in what an ABL consultant does and when borrowers need one. This is the next conversation: you have decided to bring in advisory help, and now you need to vet the person and structure the engagement before they represent you to the market.

Why the Pre-Outreach Conversation Is the One That Matters

An ABL placement is a small-world process. The middle-market ABL community is a few dozen active lenders and a tight network of credit officers who talk to each other. When a deal goes out badly — wrong lenders, incomplete package, inflated availability expectations — that impression travels. The lenders who passed remember the file. If your consultant later tries to re-approach them with a corrected story, they are working uphill.

That is why the questions below are front-loaded. They are not about catching a bad actor in a lie. They are about making sure that before anyone contacts a lender, you and your advisor agree on what the deal actually is, who it should go to, what you are paying for, and what stays under your control. Get this right and the engagement runs clean. Skip it and you may spend more time cleaning up the outreach than you would have spent placing the deal yourself.

Questions About the Work Itself

Start here, because the answers tell you whether you are talking to an advisor who does the work or a broker who forwards a summary.

• "Will you rebuild my borrowing base before we go out, or take my numbers as given?" A real advisor runs an independent eligibility test — cross-aging, concentration, contras, foreign and federal exclusions, dilution reserves, slow-moving inventory — and hands you a realistic availability number before any lender sees the file. If the answer is "we'll use your figures," you are about to take an optimistic, controller-built number to market, and the first field exam will correct it downward in front of the lender. The mechanics of that calculation are in our ineligible calculations guide and our advance rates guide.
• "What does the package you send a lender actually contain?" The answer should describe a credit memorandum in lender format — business overview, normalized financials, projections with a downside case, a collateral analysis built from real loan-tape data, an eligibility waterfall, and a proposed structure. If the answer is "a teaser" or "an executive summary," the lender's analyst will rebuild the file themselves, slowly and with worst-case assumptions. What a credit-committee-ready package looks like is laid out in our ABL credit package article, and the supporting documents in our due diligence checklist.
• "Can I see a redacted sample of a credit memorandum you have built?" The format gives away whether the consultant has done this work or is repackaging templates. A real one is thirty to fifty pages and reads like something a credit committee would act on.
• "How will you prepare me for the field exam and appraisal?" The largest source of post-term-sheet erosion is field exam findings — 8% to 22% of stated AR can come off the base if the borrower is unprepared. A consultant who cannot speak fluently to cross-age, concentration, contras, dilution, and inventory variance is going to leave availability on the table. Our field exam playbook and findings guide cover what they should be preparing you for.

Questions About Lender Fit and the Outreach Plan

This is the cluster that protects you from the shopped-deal problem. The goal is to confirm there is a deliberate, named, sequenced plan — not a blast list.

• "Which specific lenders do you plan to approach, and why those?" A real advisor can name two to five lenders and explain the fit by asset-class appetite, deal-size range, industry comfort, geography, and current pipeline. If the answer is a number — "we'll send it to our list of forty" — that is a volume model, not a fit model. Our lender selection framework describes how that fit analysis works.
• "Who at each lender will receive the deal — the credit officer or a business-development rep?" A consultant with real relationships can name the credit officers. A directory-driven shop routes to whoever answers. The difference shows up in how fast you get to a term sheet.
• "Will you get my approval on the lender list before contacting anyone?" This is the one that preserves your leverage. You should sign off on who sees the file and in what order. If the consultant wants a blanket authorization to approach the market, you are handing away control of your deal's reputation.
• "Do you sequence outreach or contact everyone at once?" Disciplined placement often goes to a short list first, learns from the responses, and refines before widening. Simultaneous blasts burn the market and signal desperation.

Questions About Compensation and Role Clarity

This is where advisor and broker models diverge most sharply, and where you most need plain answers. None of this is legal or tax advice — it is the set of practical clarifications that any borrower should get in writing before work begins.

• "Who pays you — me or the lender?" If the consultant receives transaction-based compensation from the lender, the lender-selection bias is structural: the file drifts toward whoever pays the highest referral, not whoever fits the deal. Advisory-fee compensation paid by the borrower aligns the incentive with your outcome.
• "Is your fee advisory or a success fee, and what triggers it?" Understand exactly what you are paying for and when. An advisory model charges for the diagnostic, the memorandum, the lender-fit work, and the process management — the deliverables — regardless of which lender ultimately closes.
• "Do you negotiate the term sheet, or do I?" A clean advisory role advises on which terms matter, where the market sits, and where a lender is likely to flex — but you sign the term sheet and your counsel reviews it. A consultant who negotiates on your behalf is occupying a different, often regulated, role. Be clear which one you are buying. The terms worth focusing on are in our ABL term sheet guide.
• "What are you not — broker, finder, investment adviser?" A straight answer here tells you the consultant understands their own positioning. The honest version is that an advisor helps you prepare and decide; the lender makes the credit decision; and the advisor does not promise placement or funding.

Advisor, Broker, or "Commercial Finance Advisor": Clarify the Label

The market uses "asset based lending consultant," "commercial finance advisor," "business loan consultant," and "broker" almost interchangeably, and the words carry no fixed meaning on their own. What matters is the model underneath the label. Ask directly:

Clarify	Advisory model	Deal-shopping / broker model
Deliverable	Diagnostic, credit memorandum, lender-fit analysis, process management	One-page summary forwarded to a list
Lender list	2–5 named lenders, chosen by fit, approved by you	Wide blast, chosen by volume
Who pays	Borrower, advisory fee	Often lender, transaction-based
Term sheet	You sign; advisor advises; counsel reviews	Varies; sometimes negotiated for you
Field exam	Prepares you in detail	Hands off after introduction
Promise	Process discipline, not outcomes	Sometimes "guaranteed" placement

Neither column is inherently illegitimate — but you should know which one you are engaging, because the two produce very different experiences and very different results. We described the underlying distinction in more depth in our consultant overview.

Red Flags to Listen For

Some answers should make you slow down before signing anything:

• "We can guarantee you'll get funded." No one can. The lender makes the credit decision. A guarantee is a sales line, not a capability.
• "We'll get it out to everyone this week." Speed of blast is not a virtue. Disciplined, sequenced outreach to the right lenders beats volume every time, and a fast blast often signals a thin package.
• "Don't worry about the borrowing base, the lender will figure it out." The lender will indeed figure it out — conservatively, during the field exam, after you have set expectations they will now miss.
• Vagueness about compensation. If you cannot get a clear answer about who pays and what triggers the fee, assume the structure is one you would not have chosen.
• No named lenders or credit officers. A consultant who cannot tell you who they would route your deal to does not have the relationships they imply.
• Pressure to grant blanket outreach authority. You should approve the list. A consultant who resists that is optimizing for their convenience, not your control.

What You Should Keep Under Your Own Control

Even the best advisory engagement should leave certain decisions firmly with you. Be explicit about these before work starts:

• The lender list. You approve who sees the file and in what order. This is non-negotiable leverage.
• The term sheet decision. You sign it; your counsel reviews it. Your advisor explains the market and the trade-offs, but the decision is yours. When and how to weigh competing sheets is covered in our comparing term sheets guide.
• The lender relationship. The facility is yours to live with for years. You should be in the room for the relationship, not insulated from it.
• The numbers you stand behind. Understand your own borrowing base well enough to defend it. An advisor builds it with you; you should not be a passenger on your own collateral. Our line-by-line BBC walkthrough is a good place to build that fluency.
• The decision to walk away. No engagement should commit you to accepting whatever the market offers. Keep the option to decline and reassess.

A Short Pre-Engagement Checklist

Before you authorize any consultant to approach a lender, you should be able to answer yes to each of these:

• I understand who pays the consultant and what triggers the fee.
• I have seen, or understand the contents of, the package that will represent me.
• I have a named, fit-based lender list and I have approved it.
• I know whether the consultant advises on or negotiates the term sheet.
• I understand what the consultant is not — and that no one is guaranteeing funding.
• I have a realistic availability number, not an optimistic one.
• I know how the consultant will prepare me for the field exam.
• I retain control of the lender list, the term sheet decision, and the option to walk away.

How We Approach the Engagement at DCE

We advise. We run a pre-placement diagnostic and rebuild the borrowing base to a realistic number before any lender sees the deal. We build the credit memorandum in lender format. We propose a short, named, fit-based lender list and we get your approval before we contact anyone. We charge advisory fees, not transaction-based commissions from lenders. We advise on the term sheet — you sign it and your counsel reviews it. We stand alongside your team through field exam and closing diligence, though final credit, underwriting, and funding decisions are made by the lender, not by us. We do not promise outcomes; we promise process discipline that materially improves the probability and quality of the outcome.

That approach draws on an unusual base of work. The textbook (Asset Based Lending Disciplines) is the standard reference for the discipline. The training curriculum has reached GE Capital, JP Morgan Chase, Lloyds, Barclays, and most major ABL platforms over four decades. And the parallel work at our affiliate Asset Based Lending Consultants (ABLC) — the field examination provider serving the largest ABL lenders worldwide since 1986 — gives us a current, continuous view of how lenders actually underwrite, examine, and monitor these deals.