Asset-Based Lending Operations Are Drowning in Manual Work. Here Is What to Fix First.

Every ABL shop hits the same wall. The portfolio grows, the ops team doesn't, and suddenly your best analysts are buried in spreadsheets instead of managing risk.

It's the fundamental constraint of asset-based lending operations: you can't scale the portfolio without scaling the team — unless you change how the work gets done.

The ABL Operations Trap

Look at where your operations team's time actually goes:

• 40 to 60 percent: Manual data processing — extracting, entering, validating, reconciling
• 20 to 30 percent: Monitoring and reporting — borrowing base updates, covenant tracking, portfolio reviews
• 10 to 20 percent: Exception handling — discrepancies, missing data, borrower follow-up

That first bucket is the trap. More than half your team's capacity goes to work that requires attention to detail but minimal judgment. Every new facility you add increases the processing load linearly. At 20 to 30 active facilities, you need dedicated headcount just to keep up with routine calculations.

This is why so many mid-market lenders find their back-office operations becoming the binding constraint on growth — not deal flow, not capital, not credit appetite.

The Four Workflows Killing ABL Operations

1. Borrowing Base Calculations

Each borrowing base certificate takes 1 to 4 hours to process manually — pulling aging reports, applying advance rates, calculating eligibility, cross-referencing against concentration limits. At weekly frequency across 20-plus facilities, that's a full FTE consumed by a single recurring task.

2. Draw Request Review

Every draw requires manual verification against the current borrowing base, outstanding advances, and facility terms. 2 to 4 hours per request for thorough review. Processing delays create borrower friction — and in ABL, borrower experience directly affects retention.

3. Servicer Reconciliation

For purchased or participated portfolios, reconciling servicer reports against your internal records carries the highest error rate of any ABL workflow. Discrepancies block borrowing base updates, which block draw approvals, which block everything downstream. This is the workflow where small errors cascade.

4. Collateral Monitoring

Most ABL operations run collateral reviews on a monthly cycle. But collateral values shift daily — inventory turns, receivables age, concentrations develop. Monthly monitoring means changes stay invisible for weeks. By the time you catch a deteriorating position, you've already advanced against it.

The gap between monthly monitoring and daily need is where risk hides. Teams doing daily covenant and collateral monitoring catch problems weeks earlier.

What Fixing One Workflow Looks Like

Don't try to solve all four at once. Pick the workflow with the highest frequency and most predictable structure — usually borrowing base calculations or servicer reconciliation.

Here's the approach:

Map it. Document every step, data source, decision point, and handoff. Most teams discover 20 to 30 percent more steps than they thought existed.

Measure the baseline. Time per task. Error rate. Rework frequency. You need numbers to prove ROI later.

Automate data aggregation first. The biggest time sink is almost always pulling and normalizing data from multiple sources — servicer reports, aging files, bank statements. Automate the assembly; keep human review on the output. Document intelligence handles the extraction. Your team handles the judgment.

Route exceptions, not everything. Configure rules so clean data flows through automatically. Human attention focuses only on items that fall outside expected parameters.

Expect 60 to 80 percent time reduction on the target workflow within 4 to 6 weeks. That's not a theoretical projection — it's the consistent result when you take a well-mapped, high-frequency, rule-based process and remove the manual data handling.

The Path Forward

The mistake most ABL operations teams make is trying to automate everything simultaneously. That leads to long implementation timelines, change fatigue, and unclear ROI.

Instead: one workflow at a time. Prove the time savings. Quantify the error reduction. Show the team that automation handles the tedious work so they can focus on the analytical work they were hired to do.

Then expand to workflow two.

The metric that matters is hours saved per month — not features shipped or tools purchased. If you're evaluating where to start, compare your current operational costs against the true cost of scaling manually. The math usually makes the decision obvious.

ABL operations will always require skilled professionals. The question is whether those professionals spend their time on data entry or on managing a growing portfolio.