In the US, this term refers to all financing that has corporate assets as its basis. In Europe, the term is still little used. In German-speaking countries, the term asset-based lending is almost never used because the term “lend” could be mistakingly interpreted as a loan agreement between factor and factoring client. This would mean that the factor, as lender, would have to provide funds free of charge, i.e. the factor’s unilateral obligation would not be compensated by any costs on the part of the factoring client. If asset-based lending is applied in the sense of pledging receivables, the balance sheet-reducing effect does not apply. For an outline of the ABL procedure, we therefore refer to the ABF procedure (see Asset-based Financing).