AFO · Head-to-head
Both are working-capital lines from a chartered bank or non-bank lender, but they're underwritten on fundamentally different bases. The conventional senior revolver underwrites on cash-flow coverage — the business needs 1.2–1.5x EBITDA coverage on total debt service. The ABL revolver underwrites on the borrowing base — the AR and inventory secure the line, with much less weight on cash-flow coverage. The right answer depends on the balance sheet, not the income statement.
Side by side
The matrix below pulls directly from the catalog. Each row shows the same data point across both programs so you can spot the differences at a glance.
| Attribute | ABL Revolver (Asset-Based Lending) | Conventional Senior Term Loan or Revolver |
|---|---|---|
| Capital type | Asset-based debt | Conventional senior debt |
| Family | Debt | Debt |
| Size range | $1,000,000 — Scales with assets | $500,000 — $25,000,000 |
| Typical cost | Prime + 2–5%. 85% advance on eligible AR, 50–65% on finished-goods inventory. | Prime + 1–4%. GSA + personal guarantee for closely held companies. |
| Speed to close | Weeks to a few months | Months |
| Eligibility | Working-capital-intensive business (distributors, manufacturers, staffing). Quality of AR + inventory matters more than profitability. | Operating business with 1.2–1.5x EBITDA coverage on proposed debt service. Audited or review-engagement financials typically required. |
| Use of proceeds | Working capital, Refinancing | Expansion, Acquisition, Refinancing, Equipment, Real estate, MBO / buyout |
| Status | Coming soon | Live — self-serve |
Choosing between them
Each side describes the scenarios where the program is the stronger fit. Most real-world deals end up in the “in common” section below — neither/nor.
When to choose
Pick the ABL revolver when the business is balance-sheet-rich (material AR + inventory) and either too young, too cyclical, or too lumpy on EBITDA to support a coverage-based facility. 85% advance on eligible AR, 50–65% on finished-goods inventory. The line scales with the business; interest accrues only on drawn capital.
When to choose
Pick the conventional senior revolver when the business has audited or review-engagement financials and a clean 1.2–1.5x EBITDA coverage story. Lower rate (Prime + 1–4% vs ABL's Prime + 2–5%), tighter covenants, often without a borrowing-base certificate requirement. Cleaner ongoing relationship if the business is established enough to qualify.
Both are revolving credit. Both pay down as cash lands and draw up as working capital builds. The CPA models the all-in cost of each — including the ABL field exam fees and the senior facility's covenant compliance overhead — and the structural fit before recommending one over the other.
The CPA can look at your specific situation and tell you in one twenty-minute call which program (or stack) is the right structure — and what providers will want to see before the first conversation.