For bankers (and attorneys who focus on reorganizations and bankruptcy law), there is some consolation in knowing that nothing stays the same forever. For borrowers—alas—there is some consternation in knowing nothing stays the same forever. As surely as the spigot flew open and cheap money poured out, at some point, the raging torrent will become but a trickle. But when will that happen, and what might cause it?

According to Holman: “At some point, there will be entirely too much money chasing too few assets and goods, which will drive up the prices of those assets and goods. When that inflation occurs—when there’s any sign of inflation—the Fed will start retracting. We haven’t seen it yet, but it’s probably only a matter of time. The lending deals that are in place, at ridiculously low rates and at long maturities, are life support for companies. But there’s not a lot of new ideas or job growth. At some point, troubled companies will be called to account and be purged from the system.”

What impact will those borrower-driven loan terms have on lenders once this purge begins? Taylor says: “When the pendulum starts to swing, the looser terms in loan documents borne of an excess of cash and little demand will prove less than ideal for lenders. Lenders may face challenges in calling a default and exiting a credit in a timely manner. Those softer terms will give borrowers a longer rope.”

Says Brady: “The big question is how regulators—whether it’s the Fed, or the legislative side, or the Office of the Comptroller of the Currency—will view the ABL product line. Under Dodd-Frank, will they see it as leveraged? That would put pressure on the banks and raise costs. If that happens, many lenders might get out of or restrict ABL activity. That would result in better pricing from the banks’ perspectives, but would dry up liquidity overall. You’d have fewer players looking to lend, even fewer if some alternative lenders get out. All of that would increase borrowers’ costs. Inflation could be a factor, but the significant game changer is regulation. We’ve had inflation before and figured it out. Regulation equals uncertainty as to the cost of doing business in the leveraged market.”