Oxford Finance closes cross-border ABL revolving facility for North American distributor HLC

Oxford Finance has closed a cross-border asset-based lending revolving credit facility for North American bicycle distributor HLC, providing a new source of secured working-capital funding for the business’s operations in the United States and Canada.

The transaction, announced on 14 October, was arranged in partnership with private-equity investor MiddleGround Capital, with Oxford acting as sole lender and agent.

HLC supplies bicycles, components, accessories and related products to independent retailers across North America. Its distribution activities require capital to support inventory, customer orders and the period between purchasing products and collecting payment from retailers.

The new facility uses the distributor’s asset base to support borrowing, although Oxford has not disclosed the precise categories of collateral or the amount committed.

Asset-based lending is particularly relevant to inventory-intensive distribution businesses because the availability of funding can be linked to the value of eligible assets rather than determined solely by operating earnings or fixed debt limits.

In a typical structure, eligible trade receivables and inventory can support a revolving borrowing base, allowing availability to change as assets are acquired, sold and converted into cash.

Oxford did not specify whether HLC’s arrangement includes receivables, inventory or other collateral categories, or how lending availability is calculated across the two jurisdictions.

Those distinctions matter in cross-border transactions. A lender financing assets held in different countries must account for separate security, enforcement and collateral-perfection requirements, as well as the operational arrangements governing stock and collections.

For HLC, the facility is intended to support continued growth and business development alongside MiddleGround Capital’s investment in the company.

MiddleGround, which manages more than US$4.1bn in assets, focuses on middle-market industrial and specialist distribution businesses.

The transaction also marks a further deployment by Oxford’s asset-based lending division. In September, the lender reported that the strategy had completed five transactions representing US$368m in commitments during its first year.

The amount, maturity, pricing, advance rates and borrowing-base arrangements for the HLC facility have not been disclosed. Nor has Oxford identified whether it replaces an existing financing arrangement or the amount initially drawn.

Nevertheless, the transaction demonstrates continued demand for specialist secured lending among distributors operating across national borders, particularly where funding requirements are closely linked to the movement and value of working-capital assets.