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As the coronavirus pandemic and the policy response to it continues to affect businesses and commercial credit, many borrowers are converting revolving and secured cashflow credit facilities to asset-based lending facilities. On the ABA Banking Journal Podcast — sponsored by ProfitStars, a division of Jack Henry and Associates — Ed Gately of Mitsubishi UFJ Financial Group discusses this trend and what it means for borrowers and banks. Among other topics, Gately explores:

• What businesses that find asset-based lending facilities attractive, including large and middle-market firms with large inventories such as retailers and food and beverage firms.
• How the economic tail of COVID-19 is pushing more businesses to proactively move to ABL facilities to minimize the risk of breaching covenants in cashflow facilities.
• How lenders are managing challenges of ABL facilities, such as on-site inventory appraisals, during the pandemic.
• The kinds of conversations lenders should be having with their clients when considering a change to their loan facility.

This episode is sponsored by ProfitStars, a division of Jack Henry and Associates.