Asset-based financing (ABF) from Atradius is a form of financing in which the capital asset is given as collateral. It thus serves as security for repayment of the loan. In case of default, the capital asset can be monetized. This limits or even prevents the loss. If the value of the asset is large in relation to the amount lent, that value can be relied upon when assessing the credit risk. The borrower's creditworthiness does still matter (after all, it is not preferable to monetize the capital asset), but the value of the capital asset provides additional comfort. The ABF assessment is applicable to repatriable capital goods with a predictable second-hand value.
Asset Based Finance
Asset-based financing (ABF) is financing secured by the capital asset for which the financing is required.