Credit Analysis Explained – Q&A with Ian Moody, Credit Risk Manager at Leumi ABL
Posted: 12 Nov 2025 | Share
Every major loan is subject to a credit analysis process, and asset-based lending deals are no different. To help bring to life how Leumi ABL approaches this important stage of a transaction, we spoke to the team’s Credit Risk Manager Ian Moody.
1. What, in a nutshell, is asset-based lending?
Asset-based lending is a form of financing where the facilities are typically secured by the assets on the company’s Balance Sheet. These generally include Accounts Receivable, Inventory, Plant & Machinery, and / or Property.
2. Why is a credit analysis necessary, and at what stage?
Credit analysis is really important as it allows us to determine the appropriate level of financing for a particular company and to identify the associated risks.
As a result, we typically aim to undertake the review as early on in the process as we can.
3. What are the key steps you take when performing credit analysis for an asset-based lending transaction?
While every transaction is different, each credit analysis project generally has four stages:
· Understanding the different types of collateral that will be available
· Identifying and assessing the risks in lending against that collateral
· Reviewing how the relevant industry is performing and how the potential client is positioned within that
· Establishing how we would exit or recover the facility if required
4. How does the credit analysis process differ in asset-based lending vs traditional lending?
In asset-based lending, the focus is on the collateral first and foremost, whereas in traditional lending the priority is assessing a company’s cashflows and financial performance.
While financial metrics remain important in an ABL transaction and will form part of the assessment, ultimately the collateral dynamic and performance is key.
5. What are the key financial ratios or metrics that you consider during this process?
Fundamentally, the level of financial covenant will depend on the structure being considered.
A key priority for us is finding appropriate mechanisms to monitor the performance and trends of the collateral included in the transaction, to make sure we are alive to any changes and can act accordingly.
6. What are the most common structures or covenants used in ABL deals to mitigate or manage risk?
We set covenants based on how the collateral is performing, and include a degree of flexibility; for example, this could include how promptly the borrower’s customers pay or how quickly its stock turns, and we’d also undertake an assessment of overall profitability.
7. What can the borrower do to best facilitate a smooth process?
To ensure the process is as smooth as possible, the most important thing a borrower can do is provide accurate and timely information and respond to any follow up queries swiftly and efficiently.
8. What are the main challenges you have to overcome when undertaking credit analysis on an ABL transaction?
Often, the biggest challenge is time, as the UK market is very competitive, with a number of parties contending to secure any deal. This means that we have to react, respond, and deliver within what can be very tight timescales, without ever compromising on the quality of our analysis.
Additionally, every company and transaction is different meaning there’s no cookie cutter solution to digesting, understanding, and analysing a huge amount of data in a very short amount of time.
9. What differentiates Leumi ABL’s approach to credit analysis?
The Leumi ABL team has built a reputation for working closely with its clients from the outset to understand their unique goals and providing bespoke, obstacle-free solutions. We have extensive, proven experience in structuring effective Asset Based Lending products that support a business’ ambition – whether that is refinancing, restructuring, accelerating growth, making an acquisition, MBO’s and MBI’s.
Every opportunity and proposal is different and needs to be assessed on its own merits, so there is no “one size fits all” approach to what we do. I get involved in discussions with potential clients and advisers at the earliest possible stage so that I can fully understand their business and how they work and address any challenges or concerns at the outset.
10. Can you give an example of when Leumi ABL’s credit analysis team went the extra mile on a deal?
There have been several occasions during my time at Leumi, where our credit analysis team has gone above and beyond. In competitive processes, where timing and precision are critical, we’ve consistently demonstrated our ability to unlock complex information and move quickly.
Given my previous experience across Risk, Underwriting, Audit, and Origination within asset- based lending, I have been able to provide an additional layer of expertise – whether that’s conducting in-depth contract reviews, additional due diligence on specific areas of operation, or even making site visits to discuss matters face to face.
We recently completed on an ABL facility to a Logistics firm. This was a deal where I had to get deeply involved in understanding the collateral, undertaking significant additional due diligence to review the contracts the business had agreed with its customers.
As a team, we really went the extra mile, working tirelessly to ensure we had a comprehensive understanding of the client’s operations, business model and growth targets. Our deep understanding of the logistics sector was vital to developing a financing solution aligned with the client’s unique business model, while the deal structure was tailored to reflect the complexity of their operations and ambitious growth strategy.
We executed quickly and efficiently, and that was vital in ultimately getting the deal approved.