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Asset based financing is a key source of credit for small and medium-size companies and for some larger, publicly traded companies as well. In contrast to equity financing where ownership in the company is diluted, asset-based financing allows companies to borrow funds against their own assets as collateral to generate cash for working capital and capital acquisitions without disturbing equity ownership.
In structuring these loans, asset-based loans are at the top of the company’s capital structure. The loans enjoy that priority and are generally priced on that basis, because lenders rely on their collateral as their ultimate source of payment. Accordingly, lenders and their counsel must consider all senior interests in the collateral, as well as the practical difficulties in obtaining payment in enforcement situations. Not only is a sound knowledge of the law required but also practical knowledge of the common drafting and enforcement issues likely to arise.
At this program, our expert faculty will explore the most common forms of asset-based financing, and the legal rules governing them, with particular emphasis on Article 9 of the Uniform Commercial Code and the Bankruptcy Code. In addition, the faculty will share what they have learned in representing secured creditors and borrowers in structuring asset-based loans and in enforcing them inside and outside of bankruptcy. The faculty will also discuss some special problems in asset-based financings relating to intellectual property as well as a number of ethical issues that arise in asset-based financings.
What You Will Learn
- Brief review of the basic rules for attachment, perfection, priority and enforcement of a security interest under Article 9
- Common asset-based financing structures for equipment, inventory and receivables financing with emphasis on borrowing base formulations for working capital assets
- Priority issues relating to non-UCC liens
- Enforcement and bankruptcy planning strategies
- Trends in debtor in possession asset-based financing
- Issues to address where the collateral involves or relates to intellectual property
- Cross-border asset based financing issues
- Earn one hour of Ethics credit
- Transitional credit available
Who Should Attend
This program is intended for attorneys and asset-based lenders already experienced in the field or seeking a general refresher or update. This program will review the basics of asset-based lending briefly before concentrating on more advanced issues and strategies.
Program Level: All levels
Intended Audience: This program is intended for attorneys and asset-based lenders already experienced in the field or seeking a general refresher or update.
Advanced Prep: None