SLR backs 10-day fuel supplier cycle with US$10m receivables-only ABL

SLR Business Credit has closed a US$10m senior secured asset-based facility backed solely by accounts receivable for B and B Oil Company, a 50-year-old fuel and lubricant distributor serving the southeastern United States.

The borrower, based in East Point, Georgia, distributes diesel, gasoline, oil products and lubricants to corporate customers across markets including construction, agriculture and logistics. SLR said the collateral consists of receivables due from domestic corporate entities.

The financing is designed to address a specific working-capital pressure: supplier terms of about 10 days, which SLR described as typical for the industry. Paying fuel suppliers on a short cycle can create a cash requirement before customer receivables are collected, particularly as sales volumes or commodity prices increase.

An accounts-receivable-only borrowing base can bridge that gap without relying on inventory or equipment as eligible collateral. As qualifying invoices are generated, they can support borrowing availability subject to lender eligibility tests, advance rates, concentration limits and reserves.

SLR has not disclosed those advance rates or the customer-payment terms that determine the full length of B and B Oil’s cash-conversion cycle. Pricing, maturity, utilisation and covenant details were also not disclosed. The US$10m figure should therefore be treated as facility capacity rather than evidence that the full amount has been drawn.

The structure is notable because fuel distribution combines large recurring purchases with potentially volatile nominal working-capital requirements. When fuel prices rise, the dollar amount needed to purchase the same physical volume can increase quickly, while short supplier terms can intensify the liquidity requirement.

For a receivables financier, the credit quality and concentration of the distributor’s corporate customer base therefore become central to funding availability. The lender is financing the conversion of delivered fuel sales into cash rather than lending primarily against the fuel itself.

SLR said the facility will support working-capital needs and future expansion. The company worked with B and B Oil’s management and Joseph Hale Advisors on the financing.

The deal provides a clear example of ABL being used not simply as general corporate liquidity, but to match a specific operating-cycle mismatch between rapid supplier payment and later collection of commercial receivables.