Kevin you are correct but keep in mind that many of the credits we see will not qualify with what you call a good lender may not have enough invoices to expand their line and must rely on collateral that a factor won't finance. An ABL that considers other assets as collateral may be the best financing for the client. However, in reality look at all the borrowers that migrate to the advance world in violation of their basic loan agreements.
I also agree with Richard except we have not seen enough court decisions to see if the courts will look at an advance as a loan. I believe the FDIC will take the position that anything that puts a bank in a risk not related to credit would be breaking some law.
Thanks for the spirited conversation guys. I hope more folks jump in as this is not a bad way to hear thoughts from people we respect.
Bob